Jio hives off fibre and tower businesses into separate entities

“The Jio network has over three-lakh-kilometre of fibre and about 2.2 lakh towers across India”

Jio Infocomm board has cleared the framework to move its towers and fibre assets into two separate entities to compete better with rivals Bharti Airtel and Vodafone. The move will go through once Jio receives the  necessary regulatory approvals. While the telco hasn’t stated the reason behind separating towers and fibre, it’s said to make it easier for Jio to monetise them in future. As per the notice to the stock exchange from Jio, the Board of Directors of the company, in its meeting, accorded its approval to “transfer of fibre and tower undertaking, on a going concern basis, to a separate company.” 

Mukesh Ambani-backed Jio commenced commercial operations in 2016 and has over three lakh kilometres of fibre and about 2.2 lakh towers – including those of its own as well as those acquired from Reliance Communications – spread across the country. “By hiving off (towers and fibre) into units, it will make the operating company asset light, increase its ability to leverage and open up the units for monetisation,” a senior industry executive told the Economic Times.

The move is likely to improve Jio’s profitability, which is already booming. The telco has reported a standalone net profit of Rs 681 crore for the September 2018 quarter, against a net loss of Rs 271 crore in the year-ago period. On a quarterly basis, its profit grew around 11% from Rs 612 crore in the April-June period.

In just over two years of existence, the telecom operator now caters to 252 million subscribers. This is, at the moment, the third highest subscriber base in the country, but as per a new report, Jio is likely to top the list by 2022. The top two positions are acquired by Vodafone Idea limited and Bharti Airtel.

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