Back in January, Reliance Jio Infocomm and its subsidiaries had applied for clearance from the Competition Commission of India (CCI) for buying a significant stake in the two cable and broadband companies – DEN Networks and Hathway Cable and Datacom which was granted to the telecom operator. The parent company of Reliance Jio filed the clearance, Reliance Industries Limited acquired 66% stake in DEN Networks for Rs 2290 crore and 51.3% stake for Rs 2,940 crore in Hathway Cable and Datacom, and along with that, RIL had also claimed a small stake in GTPL Hathway. Now, news has surfaced revealing that RIL has increased its stake in DEN Networks thus giving it more control in the company.
Reliance Industries Limited Increases Stake in DEN Networks
As per the disclosures of SEBI Regulations for Substantial Acquisitions of Shares and Takeovers (SAST), three Reliance Jio companies have issued information to the stock exchanges that they have increased their holdings in Indian multi-system operator (MSO) Den Networks from 66.57% to 78.62%, meaning that the telco has increased its stake by 12.05% which translates to roughly 5.75 crore shares.
It is worth noting that while Reliance Jio has been teasing the launch of its service, Reliance Jio GigaFiber and JioTV for quite some time, the telco had been facing hurdles in the last mile connectivity for FTTH. However, to resolve these issues, Reliance Jio bought stakes in cable companies in one sweep which included big names in the industry like DEN Networks and Hathway Cable and Datacom. With these companies under its banner, now Reliance Jio will be able to delve its hands into last mile connectivity for its subsidiaries.
Reliance Jio’s Investment in Cable Companies to be Done Using SPVs
The investment in these companies will be made by six Special Purpose Vehicles (SPVs) which will be owned and controlled by Digital Media Distribution Trust of which Reliance Content Distribution Limited, a wholly-owned subsidiary of RIL, is the sole beneficiary. The Mukesh Ambani led telecom operator in its Annual General Meeting of 2018 had announced that Reliance Jio GigaFiber would be rolled out to 1,100 cities in India based on the interest received from each town. During its Q3 filings, the telco had said that it had seen an immense response from the consumers during the registration phase of its FTTH service.
It had also announced that the services which will be rolled out under the GigaFiber banner would be Home broadband, Entertainment, Smart Home Solutions, Wireline, and Enterprise. Last we heard, Reliance Jio was rolling out the service to consumers on a priority basis while expanding the service area slowly.