Telecommunications giant AT&T Inc. (T: Quote) is considering buying a stake of slightly more than 25 percent in Indian billionaire Mukesh Ambani’s telecom venture Reliance Jio Infocomm Ltd. for $3.5 billion, the Times of India newspaper reported Saturday.
The deal would value Reliance Jio at $14 billion and be the largest foreign direct investment in India, according to the Times of India report. Reliance Jio is Ambani’s second telecom foray that will offer bundled voice and data services in India and will cost the billionaire $10 billion.
Ambani is reportedly ready to roll out 4G services in India later this year, most likely on December 28, 2013. The project is expected to roll out in three phases, starting with Delhi & Mumbai later this year, followed by 69 cities by 2014 and over 800 cities by early 2015.
According to the Times of India report, Ambani has spent about $4 billion in getting licenses and on infrastructure development. His company will spend another $6 billion in the next three years to launch and stabilize operations. Reliance Jio plans to break even by the end of the third year of its launch.
AT&T in November 2012 revealed plans to invest $14 billion in the next three years to ramp up its wireless and wireline IP broadband networks. The company also estimates capital expenditure of $21 billion for each of the next three years.
A potential deal with Ambani would also mark AT&T’s reentry into the Indian mobile market after the company previously exited from the Birla AT&T Tata venture, now known as Idea Cellular.
T closed Friday’s trading at $36.68, up $0.29 or 0.80 percent on a volume of 21.50 million shares.
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by RTT Staff Writer
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