RIL creates seven units for telecom, content business
The creation of the subsidiaries will make it easier for RIL to manage risks and raise funds, says an analyst
Mumbai: Reliance Industries Ltd (RIL), which bought stakes in Den and Hathway cable networks in October, has created seven subsidiaries to handle its fast-growing telecom and content businesses, a senior company official said.
These subsidiaries are Jio Content Distribution Holdings, Jio Internet Distribution Holdings, Jio Television Distribution Holdings, Jio Cable and Broadband Holdings, Jio Futuristic Digital Holdings, Jio Digital Distribution Holdings and Jio Digital Cableco Pvt. Ltd, the official said on condition of anonymity.
“These subsidiaries would undertake the businesses of broadcasting, broadband internet, wireless, data and hosting services to business and residential retail customers, cable services distribution, voice over internet protocol and video on demand, among others,” the official added.
RIL did not respond to emailed queries.
Analysts said the newly set-up companies would help RIL efficiently manage the various segments of its telecom and content businesses.
“RIL prefers creating subsidiaries for its various businesses. It is easier to manage, distribute risks and raise funds through RIL’s backing,” said an analyst with a Mumbai-based brokerage. “Besides, if the company wants to amalgamate these subsidiaries later, it can be done, too.”
RIL had in October invested ₹2,290 crore for a 66% stake in Den Networks Ltd and ₹2,940 crore for a 51.3% stake in Hathway Cable and Datacom Ltd. The deals would not only allow RIL to expand to 1,100 cities and target 50 million homes with its faster broadband services, but also reduce the cost of reaching out to customers, in addition to helping Jio GigaFiber achieve last-mile connectivity.
The subsidiaries would also set up or promote ventures relating to entertainment, e-commerce, telecom, internet, manufacture of telecom equipment or information technology-enabled service industry among others.
RIL has a policy for determining a material subsidiary for the company when its income or net worth exceeds 20% of the consolidated income or net worth, respectively of the company.
According to RIL’s annual report for 2017-18, the company liquidated or amalgamated 26 subsidiaries. RIL is parent to 84 Indian and 42 foreign subsidiaries. It also has 25 Indian and seven foreign companies as associates and 20 Indian and five foreign companies as joint ventures.
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