BANGALORE, INDIA: Reliance Communications Ltd (RCom), its subsidiary Reliance Infratel Ltd (RINFRATEL), and GTL Infrastructure Ltd on Sunday approved a Rs. 50,000 crore deal to create the world’s largest independent telecom infrastructure company.

The deal will bring 80,000 towers under one umbrella and will be neither owned nor controlled by any telecom operator.

Being one of the biggest domestic merger and acquisition deals, it brings the much-need cash flow RCom, and scalability in operations for cellular service providers, besides facilitating new telecom players to achieve the most extensive and the fastest nationwide roll out in the most cost-effective manner, according to Ramchandra Naik, principal analyst, Company and Market Intelligence, Datamonitor India.

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Further, the combined entity can also look forward to gain an approximately additional 75,000 tenancies coming in from telecom companies, due to the impending launch of 3G and Broadband Wireless Access (BWA) in India.

Economies of scale bring with itself additional benefits in terms of lower costs and wider coverage. This will help the independent tower company to consolidate its position in the Indian telecom industry and will significantly increase its competitive advantage, he added.

Naik said that the deal would benefit the subscribes too in many ways.

“The merged entity will mean better access to telecom services, improved efficiencies in terms of mobile connectivity and enhanced network coverage. Reliance Communications can focus its efforts on improved customer services and roll out the 3G services while the merged tower business will ensure that the subscribers have better access to telecom services and increased network coverage across the country,” he said.

Naveen Mishra, lead analyst, Communications Research, IDC India, says that the amalgamation of RINFRATEL assets with GTL Infrastructure will help the latter gain access to a larger network, through which it can provide wider coverage and deeper reach to its customers (telecom service providers).

“Telcos would benefit by being able to work with a single pan-India infrastructure player resulting in simplified management and reduced costs,” he added.

On the benefits to subscribers, Mishra said that the Telcos, who utilize the expanded GTL Infrastructure network, could pass on the benefits of lower costs to subscribers.