(Updated at 1 July 2010 11:15 pm)
(1 July 2010 6:50 pm)

MUMBAI: Anil Ambani will make an entry into the cable television distribution business, ahead of his plans to roll out TV channels with media conglomerate CBS.

Reliance Communications (RCOM) said Thursday it has agreed to acquire Digicable, a multi-system operator (MSO) with a pan India footprint, in an all-stock deal for an undisclosed sum.

Reliance will merge its DTH, IPTV and retail broadband operations with Digicable.

The new entity, named Reliance Digicom, will have an estimated value of $1 billion and a combined subscriber base of 11 million homes.

Reliance is yet to disclose the shareholding in the new entity. Media reports had earlier predicted Reliance would hold 60 per cent while the remaining will be with the Digicable owners including private equity firm Ashmore.

Reliance DigiCom will become Asia's largest- and globally the fifth largest- firm to offer triple play services in the form of digital TV, ultra high-speed broadband and voice, Reliance Communications said.

DigiCom plans to offer over 500 digital quality and 100 high-definition channels, IPTV, video-on-demand and gaming services.

"With this game-changing move, we hope to lead the next revolution in digital home entertainment in India," Reliance Communications chairman Anil Ambani said.

Reliance ran its digital home entertainment services through Reliance Big TV, a wholly-owned subsidiary of Reliance Communications.