AI (AFP) - Indias richest man Mukesh Ambani will return to the countrys telecom sector in a move that puts him in direct competition with his younger brother Anil with whom he had a long and bitter feud.
Mukeshs Reliance Industries said in a statement it would buy out Infotel Broadband, the only company to win a nationwide licence in Indias auction of its broadband wireless spectrum which ended Friday.
With this move, Reliance re-enters Indias telecom sector after a gap of five years.
The Ambanis, who were at loggerheads since their family empire was split in 2005, made up last month, bringing an end to their acrimonious and highly public feud.
In the asset split, Mukesh kept the oil, gas and petrochemical businesses of the groups flagship Reliance Industries, while Anil got the telecom business, its power utility division and financial services arm.
Anils Reliance Communications is Indias second largest mobile phone firm. It was run by the Ambani brothers jointly before their late fathers business empire was divided between them.
Mukesh was barred from entering the telecom sector due to a family pact signed earlier with Anil when the empire was carved up.
Last month, the two Reliance groups agreed to scrap the contentious business pact signed in 2006, which had fuelled the acrimonious row between the brothers, giving them freedom to operate in several sectors.
Reliance said it would pay 48 billion rupees (nearly one billion dollars) for a 95-percent stake in Punjab-based Infotel, giving it a strong foothold in Indias expanding wireless revolution.
On Friday, the Indian said it had government raised more than eight billion dollars through an auction of licences for wireless broadband services, after companies fought for access to the fast-growing market.
The 16-day auction brought a windfall of 383 billion rupees (8.2 billion dollars), official figures showed, weeks after nearly 15 billion dollars were raised through the sale of 3G bandwidth for mobile telephone services.
We see this as the next wave of value creation. It will pole-vault Indias economy into a digital world at an accelerated pace, Mukesh said in a statement issued late Friday.
The Reliance ADA group has welcomed Reliances entry into telecoms, saying it would offer services to them and other broadband players.
Infotel becomes a Reliance subsidiary after the deal is complete.