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India's RCom Splitting CDMA and GSM Networks Ahead of Possible Sale

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India's Reliance Communications is reported to be restructuring its network infrastructure in order to split the GSM and CDMA services ahead of a possible sale of its CDMA network.

Citing people familiar with the matter, the Economic Times said that RCom's current Chief Marketing Officer, Nilanjan Mukherjee will head up the CDMA division, while former Bharti Airtel exectutive, Ramesh Menon will join the company to run its GSM business.

The move is understood to be a recognition of the sluggish performance of the CDMA business in recent years and the limited prospects for a turnaround in a market dominated by the GSM network operators.

The separation of the two networks is also suggested to be a prelude to a sale, as the company has valuable radio spectrum assets in licenses that are not due for renewal for another six year. Any such sale would be dependent on resolving the ongoing controversy over the renewal of GSM licenses which the regulator wants to resell in an open auction instead of the more conventional automatic renewal for the existing holder.

If the licenses are resold, then the value of RCom's existing licenses declines, but if the regulator agrees to automatic renewals, then the spectrum assets, with an automatic renewal in six years time, become significantly more desirable.

A sale would also assist RCom in paying down its USD6.7 billion of debt.

On the web: Economic Times

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Tags: rcom  gsm  cdma  India