ADAG brings global businesses under Reliance Globalcom

MUMBAI: The Reliance Anil Dhirubhai Ambani group (R-ADAG) has brought all its global businesses consisting of the undersea cable business under FLAG Telecom, the ethernet business under Yipes!, and the global business of Reliance Communications, under a single umbrella brand called Reliance Globalcom. Eventually, the operations will come under a holding company that could be listed overseas, a senior official said on Wednesday.

“As this company is outside India and all its revenues are in foreign currencies, it is but natural that it will be listed on an exchange there, after evaluating where we can get the best possible investors,” Punit Garg, president, Reliance Globalcom, said. The FLAG Telecom listing, which the group had planned earlier, will not be done separately.

“If we go to market, we will go to market as Reliance Globalcom,” he added. With the consolidation, Reliance Globalcom will have annualised start-up revenues of $1.32 billion and core profits (EBITDA) of $334 million for FY08. It will have four lines of business — wholesale services under the sub-brand of Reliance FLAG, managed services, enterprise services and consumer services.

The group will also invest $2 billion in the global business, added Mr Garg. Around $200 million will go towards expansion of its ethernet footprint, $300 million towards setting up more data centres, and the largest chunk of $1.5 billion towards building next generation under-sea cable networks in the African continent, Pacific, Mediterranean and a network connecting India and Honk Kong.

The next generation network builds will be completed in two years, making it the largest private under sea cable network with landing in 50 cities, he added. The investment in the cable network will be funded through internal accruals and through pre-build commitments from carriers. As of now, Reliance Globalcom’s revenues will continue to be reflected in the consolidated results of Reliance Communications, which directly or indirectly holds stake in the Reliance Globalcom.