China Mobile offers to buy Reliance Telecom

Posted on | September 19, 2005 |

World’s largest mobile phone company by subscriber base, China Mobile has offered to buy ADAE group company Reliance Telecom. It becomes the second company after Russia’s AFK Sistema to evince interest in GSM-based Reliance Telecom (not to be confused with Reliance Infocomm).

RTL’s advantage is that it is completely debt-free and most of its subscribers are pre-paid customers, thereby reducing the risk of defaults. The company’s value has been estimated at close to $1bn but that is only likely to increase in a competitive bidding game, sources say.

Industry sources believe that a deal could eventually get done at a valuation of about $1.5 bn.

Reliance Telecom has 1.5m subscribers and provides mobile services in eight telecom circles of West Bengal, Kolkata, Bihar, Assam, the North-East, Madhya Pradesh, Orissa and Himachal Pradesh.

As of July

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