Reliance is simply in no mood to let anything come in the way of its mega launch of Jio GigaFiber. Ever since its announcement, reliance has been throwing major setbacks for the competition and putting them in a state of tizzy. With another big blow coming from Reliance, they are all set to acquire the biggest cable network Hathway.
Valuation
Though the talks are initial stages and we don’t know if the deal will go through or not, but Reliance is aggressively pursuing it. The valuation figures are being estimated at a whopping 2,500 crores.
The History
Last year Reliance was in talks with the second largest player DEN cable, but the deal did not go through, it was that time valuated at 2,200 crores. After that fallout, Reliance decided to go solo with their launch and started prepping for the same. They have been offering plans with benefits that are consumer-centric and putting competition in a spot.
The Issues
Reliance since then started facing issues from the local cable operators who were not in support and this was delaying the whole launch plan. Hence revisiting the earlier proposition to acquire a cable network seemed like a solution.
The Benefits
This deal could prove a win-win for both the parties involved. Hathway which had a debt of Rs, 1617 crore at the end of March, can look at deleveraging the balance sheet by 500 crores in the next two years. The acquisition of Hathway will give Reliance the kickstart it needs for GigaFiber, as it would bring more than 11 million digital cable TV subscribers and 800,000 broadband users, out of which 90% have over 40mbps plans. Hathway had an average revenue of Rs 710 per month per broadband user in the June quarter.
These talks don’t come as a surprise to any of the industry experts as Reliance needs the local cable operators to support to get to the last leg of launch and thus acquisition with Hathway seems a viable solution.
Now let us wait and watch whether the deal comes through this time or not.
