Reliance-21-7-06

Company Press Release: REORGANISATION OF RELIANCE COMMUNICATIONS GROUP SANCTIONED BY THE HIGH COURTS

Reliance Communications to become the main operating company providing basket of telecommunication services with 21 million individual and enterprise customers – India's largest.
Reliance Infocomm to merge with Reliance Communications
Reliance Communications market cap to be about Rs. 50,000 crores
Re-organisation achieved through a share swap only, with no cash outgo

Mumbai, July 21, 2006: The Hon'ble High Court of Judicature at Bombay has today sanctioned the Scheme of Amalgamation and Arrangement of Reliance Communications Limited leading to creation of one of the India's largest private sector company in terms of
market capitalization and the largest private sector telecommunications service provider in terms of subscribers, assets, and coverage. The Scheme had earlier been approved by Hon'ble High Court of Gujarat on July 18, 2006.

Pursuant to this reorganisation, Reliance Infocomm Limited will merge with Reliance Communications and Reliance Telecom Limited, the GSM service provider, and FLAG Telecom will become 100% subsidiaries of Reliance Communications. The reorganisation has resulted in alignment of the interest of all shareholders in a single listed entity for all Reliance Communications businesses; creating synergies on account of consolidation of interests; simple and transparent ownership structure for Reliance Anil Dhirubhai Ambani Group's communications services businesses; eliminating areas of potential conflict of interest and related party transactions; and unlocking and maximizing value of the over 2 million shareholders.

The re-organisation up holds the highest principles of transparency, fairness and corporate governance and it is a historic milestone in the endeavor of the Reliance Anil Dhirubhai Ambani Group to create the most valuable India based global communications Services Company.

Reliance Communications Limited, a member of the Reliance Anil Dhirubhai Ambani Group (Reliance ADA Group), is India's foremost integrated telecommunications company with over 21 million Indian and 500,000 global individual consumers. Reliance
Communications corporate clientele includes 600 Indian and 250 multinational corporations, and – through subsidiary FLAG Telecom - over 200 global carriers. Reliance Communications, has a pan-Indian, next generation, integrated (wireless and wireline),
convergent (voice, data and video) digital network that is capable of supporting best-of-class services spanning the entire Infocomm value chain.