After sharing towers and inter-city fibre, Mukesh Ambani-owned Reliance Jio Infocomm (RJI) and Anil Ambani-owned Reliance Communications (RCOM) today (April 7, 2014) signed an agreement for sharing later’s intra-city optical fibre cable (OFC) network.

This is third such deal between the two brothers who were earlier fighting for control of the business empire left by their father Dhirubhai Ambani.

There was no official announcement on size of the deal. However, a source familiar with the development pegged it at Rs 5,000 crore. “There will be annual payment on the basis of life of cable,” said the source.

It is a win-win deal for both the brothers. RCOM has a debt of about Rs 43,000 crore and its interest payment is about Rs 2,900 cr per annum. Under this deal the company would get about Rs 400 crore per annum as rental from OFC. RJI will get head start in launching its 4G services due to inter-city OFC.

                          
 
It is also expected to get close to Rs 1,000 crore through lease of its towers. It will help the company to repay its interest.
 
Last year, Reliance Jio Infocomm had signed a Rs 11,000 cr ($2 billion) deal with RCOM for sharing later's 45000 towers for about 10-12 years for its 4G services.
 
The two companies also signed a deal for sharing RCOM’s nationwide network of inter-city optical fibre cable (OFC). RCOM got about Rs 1,200 crore per annum under the OFC deal.

                                  

“Under the terms of the agreement, Reliance Jio Infocomm will utilize RCOM’s nationwide intra-city fiber network for accelerated roll-out of its state-of-the-art 4G services across the country,” said RCOM in a statement issued today.

“The agreement is based on arm’s length pricing at prevailing market prices. RCOM’s intra-city optic fiber network extends to nearly 500,000 fiber pair kilometers, across the top more than 300 cities and towns in India.”