Thursday, 27 January 2022

Does Reliance Jio want a slice of BT?

by Harry Baldock, Total Telecom
Monday 29 November 21

Reports suggest that Mukesh Ambani’s Reliance Jio could be lining up an unsolicited offer for stake in the UK’s largest telco

According to sources speaking to the Economic Times, Reliance Jio could be looking to buy into BT –potentially even seizing a controlling stake of the business. If Reliance were to take control of BT, it would be one of the largest M&A projects ever undertaken by an Indian company. An alternative strategy, reportedly also in discussion…

According to sources speaking to the Economic Times, Reliance Jio could be looking to buy into BT –potentially even seizing a controlling stake of the business.

If Reliance were to take control of BT, it would be one of the largest M&A projects ever undertaken by an Indian company.

An alternative strategy, reportedly also in discussion, would see Reliance partner with BT’s fixed broadband arm Openreach, helping to fund the company’s huge rollout of fibre infrastructure across the UK. This, however, appears to be less likely, with BT saying last month that their more robust financial results meant they were no longer looking a new financial or strategic partner to help them complete the company’s planned rollout to an additional 5 million homes.

For BT, the offer would come at a time of much upheaval. Earlier this year, billionaire Patrick Drahi formed Altice UK, subsequently becoming BT’s largest shareholder with the purchase of a 12.1% stake for $2.5 billion. At the time, Drahi said he was not interested in taking over the business, but speculation over the future of BT has nonetheless been rife in recent months. In fact, sources last month were suggesting that Drahi was indeed looking to increase his stake in the business, with BT’s falling share prices making the move very appealing. 

Drahi must wait until December 11th before making any further moves on BT shares, according to UK law. 

Mukesh Ambani (pictured) and Reliance, meanwhile, have been increasingly looking overseas for telecoms investment opportunities in recent months. Back in August, the Indian giant was linked to a potential purchase of T-Mobile Netherlands, though it was in fact a consortium comprising Apax and Warburg Pincus that ultimately purchased the operator for €5.1 billion the following month. 

If discussions with BT are underway, it is clear that they are still in the early stages, with sources suggesting that no deal was yet guaranteed.

Back in its home market of India, Reliance Jio has recently announced that it will join its rivals, Bharti Airtel and Vi, in increasing the prices of its mobile price plans. The decision come as both Airtel and Vi struggle to make a profit in a highly competitive market while also struggling under the weight of enormous government debts.

 

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Also in the news: 
Vodafone combining solar and wind for self-powered mobile masts
Orange CEO Stephane Richard steps down following conviction
UK ISP group takes on the telecom skills shortage

 

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