Company Press Release:
 
RELIANCE COMMUNICATIONS LIMITED BOARD APPROVES
TRANSFER OF WIRELESS TOWERS AND RELATED INFRASTRUCTURE
(CDMA AND GSM) TO 100% SUBSIDIARY
SCHEME TO RESULT IN SUBSTANTIAL UNLOCKING OF FINANCIAL VALUE
FOR NEARLY 2 MILLION RCOM SHAREHOLDERS
SCHEME TO PROVIDE ENHANCED OPERATIONAL
AND FINANCIAL FLEXIBILITY FOR RCOM

Mumbai, November 2, 2006: The Board of Directors of Reliance Communications Limited (“RCOM”) today approved a scheme for the transfer of the existing wireless towers (CDMA and GSM) and related infrastructure of the Company, to a 100% subsidiary, subject to necessary approvals.

Commenting on the development, Anil D. Ambani, Chairman, said, ”This is the first of a series of initiatives we will be taking to remain asset-light, and enhance our competitiveness, ultimately leading to unlocking of further value for the benefit of our nearly 2 million shareholders.”

The Board noted that the scheme will result in further enhancing shareholder value, and provide enhanced operational and financial flexibility for RCOM.

The Board also decided that, henceforth, all new towers and related infrastructure will be set up by the Tower Company (TowerCo), with independent financing, thereby reducing capex requirements and leveraging on RCOM’s own Balance Sheet.

The Board took into consideration inter alia the following factors, while approving the scheme:

~ Accelerating wireless subscriber growth in India
~ Increasing geographic coverage, particularly in less dense regions, creating the need for setting up substantial new towers infrastructure
~ Increasing network capacity requirements to sustain additional users and higher Minutes of Use (MOU)
~ The multi-operator market in India, creating opportunities for tower sharing and co-location, with up to 6 tenants per tower
~ Trend towards low ARPUs, creating the need for the most efficient capital investment and financing structure
~ The international benchmark of independent Tower Operating Companies, enjoying multi-billion dollar valuations


Reliance Communications Limited is part of the Reliance – Anil Dhirubhai Ambani Group.

RCOM is India’s largest integrated communications service provider in the private sector with over 28 million individual consumer, enterprise, and carrier customers.

We operate pan-India across the full spectrum of wireless, wireline, and long distance, voice, data, and internet communication services. We also have an extensive international presence through the provision of long distance voice, data and internet services and submarine cable network infrastructure globally.