Angel Broking has maintained 'Neutral' on Reliance Communications (RCom) in its report.

Commenting on the investment rationale, the stock broker said, ''Reliance Jio Infocomm and Reliance Communications have signed an agreement for sharing RCom's intra-city optic fiber infrastructure, the third cooperation pact between two companies. Under the terms of the agreement, Reliance Jio Infocomm will utilise RCom's nationwide intra-city fiber network for rolling out its 4G services across the country. The agreement is based on arm's length pricing at prevailing market prices.

RCom's intra-city optical fibre network extends to nearly 500,000 fibre-pair kilometres across the top 300 cities and towns in India. While the companies did not disclose the financial terms of the agreement, as per media reports RCom is expected to get 50 billion over the next 16 years (licence period) from the deal. This is based on the rough estimate of the total fibre and the prevailing market prices.

Reliance Jio, which holds 1800MHz spectrum across 14 circles and 2300MHz across 22 circles, plans to launch services by October or December this year. In addition to telecom services, the company is planning to offer TV channels on its 4G broadband network. We maintain our Neutral rating on RCom.''

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