A report by Kotak Institutional Equities suggested that Indian conglomerate Reliance Industries should acquire a telecoms operator to strengthen its business, prompting speculation of a renewed partnership with Reliance Communications (RCOM) – although the finance house subsequently noted that it is not aware of any such talks. According to the Economic Times, Reliance Industries needs to bolster its telecoms presence following its acquisition of a broadband wireless access (BWA) licence last year – currently its only presence in the comms space. The report notes: “we are not too sure about the economics of a standalone BWA business.” However, Kotak said that a telco deal may not add much value to Reliance Industries, due to the fact that the market is already hugely competitive, regulations are tough, and the presence of two “Reliance” businesses in the same market may confuse subscribers.

Reliance Industries and Reliance Communications were previously part of the same group, but were split into two entities in 2005. The companies are now controlled by two brothers: Mukesh Ambani is head of Reliance Industries, while his younger brother, Anil Ambani, heads RCOM. Reliance Industries acquired a 95 percent stake in Infotel Broadband, the only winner of a national fixed broadband licence, last year.