Reliance sets up seven subsidiaries to run telecom, content businesses
Reliance Industries Ltd (RIL), which purchased stakes in Den and Hathway cable networks in October, has created seven subsidiaries to handle its fast-growing telecom and content businesses, said a senior company official.
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, said the official, requesting 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,” said the official.
RIL did not respond to emailed queries.
Analysts said the newly set-up companies would help RIL to efficiently manage the various segments of its telecom and content businesses.
“RIL prefers creating subsidiaries for its various businesses.
MUMBAI:
It is easier to manage, distribute risks and raise funds through RIL’s backing. Besides, if the company wants to amalgamate these subsidiaries later, it can be done too,” said an analyst with a Mumbai-based brokerage.
RIL had in October invested Rs 2,290 crore for a 66% stake in Den Networks Ltd and Rs 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 enables service industry among others.
RIL has a policy for determining a material subsidiary for the company when its income or networth 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 7 foreign companies as associates and 20 Indian and 5 foreign companies as joint ventures.