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Reliance Communications

Reliance Communications Limited (RCOM) was an Indian mobile network provider headquartered in Navi Mumbai that offered voice and 2G and 3G and 4G data services. In February 2019, the company filed for bankruptcy as it was unable to sell assets to repay its debt.[3] It has an estimated debt of 500 billion (equivalent to 530 billion or US$6.6 billion in 2020) against assets worth 180 billion (equivalent to 190 billion or US$2.4 billion in 2020).[4]

Reliance Communications Limited
TypePublic
ISININE330H01018
IndustryTelecommunication
Founded15 July 2004; 18 years ago (15 July 2004)
FounderAnil Ambani
FateBankruptcy (Mobile Network Division)
HeadquartersDAKC, ,
Area served
Worldwide
Key people
  • Anil Ambani
    (Chairman)
  • Bill Barney
    (Co-CEO)
  • Manikantan Viswanathnan
    (CFO)
  • Prakash Shenoy
    (Company Secretary)
Products
Services
  • Internet Services
  • Network Services
  • Cloud Networking
  • Data Center Services
  • Enterprise Voice
  • Cloud Telephony
  • Collaboration Services
  • Wholesale Voice
  • Value Added Services (VAS)
Revenue 40.15 billion[1] (2019)
8.67 billion (2019)
Members9,479[2]
(June 2021)
Number of employees
3,038 including
1,819 permanent employees (2018)
ParentReliance ADAG
Divisions
Subsidiaries
Websitewww.rcom.co.in

As of March 2020, the company reworked its strategy and continues to operate 4G data services, fixed-line communications, data center services, and enterprise solutions as well as subsea cable networks under the banner name, "Global Cloud Xchange".[5]

History

Reliance Communications was founded in India on 15 July 2004 as Reliance Infocomm Limited[6] with the introduction of its nationwide CDMA2000 service. It became Reliance Communications Limited in 2006.[7] The company introduced its GSM service in 2008. It began using MIMO technology in 2011 to improve the quality of its 3G service, providing a data rate of up to 28 Mbit/s.[8]

In the 2010 spectrum auction, Reliance obtained licenses for 3G spectrum in three cities at a total licensing fee of 58.64 billion (equivalent to 110 billion or US$1.4 billion in 2020).[9] The company reduced the price of its 3G service by 61 percent in May 2012.[10]

Reliance and Lenovo introduced their co-branded Android smartphones in India in 2013.[11]

The company ended its CDMA operations in 2016, and migrated its subscribers to its GSM and LTE networks by September the same year.[12][13]

Acquisition of MTS India and Digicable

On 1 July 2010, the board of Reliance Communications confirmed the acquisition of Digicable India's largest cable network in all-stock deal. The new entity was named Reliance Digicom, which integrated RCOM's DTH TV, IPTV and retail broadband operations with Digicable.[14]

On 14 January 2016, Reliance Communications announced that it had acquired Sistema Shyam TeleServices Limited (SSTL, operating as MTS India) in an all-stock deal. SSTL received a 10 per cent stake in Reliance Communications after repaying its existing debt. Reliance Communications would assume responsibility for instalments that MTS owed the government for spectrum purchases, amounting to 3.92 billion (equivalent to 4.8 billion or US$60 million in 2020) every year for 10 years. As a result of the deal, Reliance acquired MTS India's subscribers and SSTL's spectrum in the 850 MHz band.[15]

India's antitrust regulator, the Competition Commission of India (CCI) approved the merger in February 2016.[16] The Securities and Exchange Board of India (SEBI) also cleared the deal. SSTL shareholders approved the merger on 18 March 2016.[17] By mid-August, it was approved by tax authorities and the shareholders and creditors of Reliance and SSTL.[18] The merger was approved by the Rajasthan High Court on 30 September 2016[19] and the Bombay High Court on 7 October 2016.[20] In April 2017, Reliance laid off 600 employees in preparation for its mergers with MTS and Aircel.[21] The Department of Telecommunications gave the final approval for the merger on 20 October 2017.[22][23] On 31 October 2017, Reliance Communications announced that the merger was complete.[24][25]

Attempted merger with Aircel

In September 2016, Reliance Communications announced Aircel had agreed to a merger.[26][27]

The company announced on 15 March 2017 the Securities and Exchange Board of India, Bombay Stock Exchange, and National Stock Exchange of India approved the merger.[28][29][30] The deal was approved by the CCI on 20 March.[31][32] Aircel and Reliance shareholders approved the merger on 22 and 24 April 2017, respectively,[33] and it was expected to be completed by mid-2017.[34]

However, on 1 October, Reliance allowed the merger agreement to lapse.[35] The deal, which was expected to help the company repay 250 billion (equivalent to 300 billion or US$3.7 billion in 2020) of debt, was cancelled due to delays by entrenched competition.[36] Reliance was looking at other options to meet their obligations under the SDR agreement and avoid insolvency proceedings by banks.[37] Due to the failed Aircel merger, the company announced to employees in the wireless and DTH businesses on 25 October 2017 that they would be redundant effective 30 November. On 29 December 2017, Reliance discontinued voice services in India and provided only 4G data service.

The Ericsson case

In 2013, RCom signed a multi-year managed services agreement (MSA) with Ericsson to manage services of wireline and wireless network of 100,000 kilometres (62,000 mi) of fiber and mobile infrastructure in 11 telecom circles in India. This arrangement was a smooth business relationship until 2016, post which RCom struggled to pay the dues. This has been seen as an effect of Reliance Jio that disrupted the Indian telecom industry with its aggressive pricing after its commercial launch in September 2016 that affected all leading telecom players.

By September 2017, Ericsson terminated the MSA and approached the NCLT to recover dues of 11 billion (equivalent to 13 billion or US$160 million in 2020).[38] By May 2018, the NCLT initiated insolvency proceedings even as RCom tried to sell spectrum and other assets. At the same time, RComm reached out to Ericsson and agreed to pay 5.5 billion (equivalent to 6.3 billion or US$78 million in 2020) as a settlement with a personal guarantee from Anil Ambani on the condition of withdrawal of insolvency proceedings. The Supreme Court reviewed the matter in August 2018 and ordered RComm to pay up 5.5 billion (equivalent to 6.3 billion or US$78 million in 2020) to Ericsson by 30 September. RCom failed to comply with the payment and sought an extension of 60 days to comply. Ericsson filed a contempt petition in Supreme court.

In February 2019, the Supreme Court has held Anil Ambani and three others guilty of contempt of court and directed them to make payments by 19 March. In the meantime, Mukesh Ambani, the elder brother of Anil helped him with a bailout of 4.63 billion (equivalent to 4.9 billion or US$61 million in 2020) which he paid just a day before the deadline on 18 March.[39] Reliance Communications Limited has paid 5.5 billion (equivalent to 5.8 billion or US$73 million in 2020) to Swedish multinational telecom and networking firm Ericsson a day before the Supreme Court’s deadline, the Anil Ambani-led company said in a statement.

Sale of the company's assets

During 2020, a consortium of companies is bidding upwards of $200 Million USD to buy the assets of Reliance Communications.[40] Members of the consortium include NKV Krishna's White Lotus Group, Mukesh Ambani's Reliance Group, Bharti Airtel, UV Asset Reconstruction (UVARCL) and US-based Varde Partners.[41]

References

  1. ^ "Investor Relations – Financial Results". Reliance Communications. Retrieved 28 February 2019.
  2. ^ "Press Release on Telecom Subscription Data as on 31st October, 2020" (PDF). trai.gov.in. 20 February 2019.
  3. ^ Siddiqui, Danish (1 February 2019). "RCom goes to bankruptcy court to resolve debt burden". Reuters. Retrieved 28 February 2019.
  4. ^ ET Bureau (2 February 2019). "RCom to move NCLT to offload assets, repay debt". The Economic Times. Retrieved 28 February 2019.
  5. ^ "GCX". Global Cloud Xchange. Retrieved 22 January 2020.
  6. ^ "Reliance set to revolutionise mobile services". Rediff. 27 December 2002. Retrieved 29 November 2017.
  7. ^ "Stocks". Bloomberg News.
  8. ^ [42 Mbps]
  9. ^ . The Hindu. Chennai, India. 14 December 2010. Archived from the original on 17 December 2010. Retrieved 8 March 2011.
  10. ^ "RCom slashes 3G tariff by 61%". The Times of India. 25 May 2012. Archived from the original on 26 January 2013. Retrieved 25 May 2012.
  11. ^ . The Hindu. 31 January 2013. Archived from the original on 28 May 2018.
  12. ^ "RCom kicks off migration process; to upgrade CDMA subscribers to 4G LTE network". Telecom Talk. 2 April 2016. Retrieved 14 September 2016.
  13. ^ "Reliance Communications Posts Nearly 6% Rise in Q1 Profit". NDTV. Retrieved 14 September 2016.
  14. ^ "RCOM acquires Digicable in all-stock deal". The Times of India. 1 July 2010. Archived from the original on 8 October 2013. Retrieved 6 October 2013.
  15. ^ "Reliance Communications acquires Sistema's MTS India in all-stock deal". Business Today. Retrieved 6 September 2016.
  16. ^ "Reliance Communications gets CCI approval to acquire MTS". NDTV. Retrieved 6 September 2016.
  17. ^ "Sistema Shyam shareholders approve merger with Reliance Communications". The Economic Times. Retrieved 6 September 2016.
  18. ^ "DoT's approval for SSTL-RCOM merger likely in Q4: Sistema". The Economic Times. Retrieved 6 September 2016.
  19. ^ "RCom gets Rajasthan HC approval for Sistema acquisition". Business Standard. Press Trust of India. 30 September 2016. Retrieved 1 October 2016.
  20. ^ "Reliance Communication gets Bombay HC approval for Sistema acquisition". The Economic Times. Retrieved 8 October 2016.
  21. ^ "Pink slips for 600 as Reliance Communications trims fat". The Economic Times. Retrieved 5 May 2017.
  22. ^ "Telecom department approves RCom-MTS merger". The Economic Times. Retrieved 18 November 2017.
  23. ^ "RCom-Sistema Shyam merger gets DoT approval". The Economic Times. 23 October 2017. Retrieved 24 October 2017.
  24. ^ "Reliance Communications Completes Merger With MTS". NDTV. Retrieved 18 November 2017.
  25. ^ "Reliance Communications completes merger with MTS". Zee News. 31 October 2017. Retrieved 18 November 2017.
  26. ^ "RCom, Aircel announce merger; create fourth largest telco in India". The Times of India. 14 September 2016. Retrieved 6 October 2021.
  27. ^ Pandey, Piyush (14 September 2016). "RCom-Aircel merger a strong challenger to Idea Cellular". The Hindu. ISSN 0971-751X. Retrieved 14 September 2016.
  28. ^ "Reliance Communications Gets SEBI, Exchanges Nod For Aircel Merger". NDTV. Retrieved 20 March 2017.
  29. ^ "Reliance Communications gets Sebi nod for merger with Aircel". Business Standard India. Press Trust of India. 15 March 2017. Retrieved 20 March 2017.
  30. ^ "RCom-Aircel merger gets SEBI nod". Business Line. 15 March 2017. Retrieved 20 March 2017.
  31. ^ "RCOM gets CCI approval for Aircel merger". India.com. Indo-Asian News Service. 20 March 2017. Retrieved 20 March 2017.
  32. ^ Lead, Telecom (20 March 2017). "RCOM-Aircel merger deal gets CCI approval". Telecom Lead. Retrieved 20 March 2017.
  33. ^ "Anil Ambani-driven RCom, Aircel shareholders approve merger – ET Telecom". ETTelecom.com. Retrieved 5 May 2017.
  34. ^ "RCom says Aircel merger to be completed by 2017 middle, MTS merger by March". Telecom Talk. Retrieved 15 February 2017.
  35. ^ "RCom abandons mobile business merger with rival Aircel". Financial Times. Archived from the original on 10 December 2022. Retrieved 18 November 2017.
  36. ^ Sengupta, Devina (2 October 2017). "RCom calls off Aircel merger; blames legal uncertainties, policy directives for delay". The Economic Times. Retrieved 2 October 2017.
  37. ^ Raj, Amrit (3 October 2017). "RCom readies for fire sale of its assets to pare debt, as Aircel merger fails". Livemint. Retrieved 2 October 2017.
  38. ^ "Trouble call".
  39. ^ "A timeline of Reliance Communications versus Ericsson case". Moneycontrol. Retrieved 19 March 2019.
  40. ^ www.ETTelecom.com. "RCom lenders to meet Jan 2 to consider asset bids – ET Telecom". ETTelecom.com. Retrieved 12 May 2020.
  41. ^ "Airtel, Reliance, 3 others may submit bids for RCom assets on Monday". The Financial Express. 24 November 2019. Retrieved 12 May 2020.

External links

  • Official website  

reliance, communications, confused, with, reliance, limited, rcom, indian, mobile, network, provider, headquartered, navi, mumbai, that, offered, voice, data, services, february, 2019, company, filed, bankruptcy, unable, sell, assets, repay, debt, estimated, d. Not to be confused with Reliance Jio Reliance Communications Limited RCOM was an Indian mobile network provider headquartered in Navi Mumbai that offered voice and 2G and 3G and 4G data services In February 2019 the company filed for bankruptcy as it was unable to sell assets to repay its debt 3 It has an estimated debt of 500 billion equivalent to 530 billion or US 6 6 billion in 2020 against assets worth 180 billion equivalent to 190 billion or US 2 4 billion in 2020 4 Reliance Communications LimitedTypePublicTraded asNSE RCOMBSE 532712ISININE330H01018IndustryTelecommunicationFounded15 July 2004 18 years ago 15 July 2004 FounderAnil AmbaniFateBankruptcy Mobile Network Division HeadquartersDAKC Navi Mumbai Maharashtra IndiaArea servedWorldwideKey peopleAnil Ambani Chairman Bill Barney Co CEO Manikantan Viswanathnan CFO Prakash Shenoy Company Secretary ProductsMobile TelephonyWireless InternetDigital TelevisionServicesInternet ServicesNetwork ServicesCloud NetworkingData Center ServicesEnterprise VoiceCloud TelephonyCollaboration ServicesWholesale VoiceValue Added Services VAS Revenue 40 15 billion 1 2019 Net income 8 67 billion 2019 Members9 479 2 June 2021 Number of employees3 038 including 1 819 permanent employees 2018 ParentReliance ADAGDivisionsMobile NetworkInternetTelevisionEnterpriseSubsidiariesGlobal Cloud Xchange DigicableWebsitewww wbr rcom wbr co wbr inAs of March 2020 the company reworked its strategy and continues to operate 4G data services fixed line communications data center services and enterprise solutions as well as subsea cable networks under the banner name Global Cloud Xchange 5 Contents 1 History 1 1 Acquisition of MTS India and Digicable 1 2 Attempted merger with Aircel 1 3 The Ericsson case 1 4 Sale of the company s assets 2 References 3 External linksHistory EditReliance Communications was founded in India on 15 July 2004 as Reliance Infocomm Limited 6 with the introduction of its nationwide CDMA2000 service It became Reliance Communications Limited in 2006 7 The company introduced its GSM service in 2008 It began using MIMO technology in 2011 to improve the quality of its 3G service providing a data rate of up to 28 Mbit s 8 In the 2010 spectrum auction Reliance obtained licenses for 3G spectrum in three cities at a total licensing fee of 58 64 billion equivalent to 110 billion or US 1 4 billion in 2020 9 The company reduced the price of its 3G service by 61 percent in May 2012 10 Reliance and Lenovo introduced their co branded Android smartphones in India in 2013 11 The company ended its CDMA operations in 2016 and migrated its subscribers to its GSM and LTE networks by September the same year 12 13 Acquisition of MTS India and Digicable Edit On 1 July 2010 the board of Reliance Communications confirmed the acquisition of Digicable India s largest cable network in all stock deal The new entity was named Reliance Digicom which integrated RCOM s DTH TV IPTV and retail broadband operations with Digicable 14 On 14 January 2016 Reliance Communications announced that it had acquired Sistema Shyam TeleServices Limited SSTL operating as MTS India in an all stock deal SSTL received a 10 per cent stake in Reliance Communications after repaying its existing debt Reliance Communications would assume responsibility for instalments that MTS owed the government for spectrum purchases amounting to 3 92 billion equivalent to 4 8 billion or US 60 million in 2020 every year for 10 years As a result of the deal Reliance acquired MTS India s subscribers and SSTL s spectrum in the 850 MHz band 15 India s antitrust regulator the Competition Commission of India CCI approved the merger in February 2016 16 The Securities and Exchange Board of India SEBI also cleared the deal SSTL shareholders approved the merger on 18 March 2016 17 By mid August it was approved by tax authorities and the shareholders and creditors of Reliance and SSTL 18 The merger was approved by the Rajasthan High Court on 30 September 2016 19 and the Bombay High Court on 7 October 2016 20 In April 2017 Reliance laid off 600 employees in preparation for its mergers with MTS and Aircel 21 The Department of Telecommunications gave the final approval for the merger on 20 October 2017 22 23 On 31 October 2017 Reliance Communications announced that the merger was complete 24 25 Attempted merger with Aircel Edit In September 2016 Reliance Communications announced Aircel had agreed to a merger 26 27 The company announced on 15 March 2017 the Securities and Exchange Board of India Bombay Stock Exchange and National Stock Exchange of India approved the merger 28 29 30 The deal was approved by the CCI on 20 March 31 32 Aircel and Reliance shareholders approved the merger on 22 and 24 April 2017 respectively 33 and it was expected to be completed by mid 2017 34 However on 1 October Reliance allowed the merger agreement to lapse 35 The deal which was expected to help the company repay 250 billion equivalent to 300 billion or US 3 7 billion in 2020 of debt was cancelled due to delays by entrenched competition 36 Reliance was looking at other options to meet their obligations under the SDR agreement and avoid insolvency proceedings by banks 37 Due to the failed Aircel merger the company announced to employees in the wireless and DTH businesses on 25 October 2017 that they would be redundant effective 30 November On 29 December 2017 Reliance discontinued voice services in India and provided only 4G data service The Ericsson case Edit In 2013 RCom signed a multi year managed services agreement MSA with Ericsson to manage services of wireline and wireless network of 100 000 kilometres 62 000 mi of fiber and mobile infrastructure in 11 telecom circles in India This arrangement was a smooth business relationship until 2016 post which RCom struggled to pay the dues This has been seen as an effect of Reliance Jio that disrupted the Indian telecom industry with its aggressive pricing after its commercial launch in September 2016 that affected all leading telecom players By September 2017 Ericsson terminated the MSA and approached the NCLT to recover dues of 11 billion equivalent to 13 billion or US 160 million in 2020 38 By May 2018 the NCLT initiated insolvency proceedings even as RCom tried to sell spectrum and other assets At the same time RComm reached out to Ericsson and agreed to pay 5 5 billion equivalent to 6 3 billion or US 78 million in 2020 as a settlement with a personal guarantee from Anil Ambani on the condition of withdrawal of insolvency proceedings The Supreme Court reviewed the matter in August 2018 and ordered RComm to pay up 5 5 billion equivalent to 6 3 billion or US 78 million in 2020 to Ericsson by 30 September RCom failed to comply with the payment and sought an extension of 60 days to comply Ericsson filed a contempt petition in Supreme court In February 2019 the Supreme Court has held Anil Ambani and three others guilty of contempt of court and directed them to make payments by 19 March In the meantime Mukesh Ambani the elder brother of Anil helped him with a bailout of 4 63 billion equivalent to 4 9 billion or US 61 million in 2020 which he paid just a day before the deadline on 18 March 39 Reliance Communications Limited has paid 5 5 billion equivalent to 5 8 billion or US 73 million in 2020 to Swedish multinational telecom and networking firm Ericsson a day before the Supreme Court s deadline the Anil Ambani led company said in a statement Sale of the company s assets Edit During 2020 a consortium of companies is bidding upwards of 200 Million USD to buy the assets of Reliance Communications 40 Members of the consortium include NKV Krishna s White Lotus Group Mukesh Ambani s Reliance Group Bharti Airtel UV Asset Reconstruction UVARCL and US based Varde Partners 41 References Edit Investor Relations Financial Results Reliance Communications Retrieved 28 February 2019 Press Release on Telecom Subscription Data as on 31st October 2020 PDF trai gov in 20 February 2019 Siddiqui Danish 1 February 2019 RCom goes to bankruptcy court to resolve debt burden Reuters Retrieved 28 February 2019 ET Bureau 2 February 2019 RCom to move NCLT to offload assets repay debt The Economic Times Retrieved 28 February 2019 GCX Global Cloud Xchange Retrieved 22 January 2020 Reliance set to revolutionise mobile services Rediff 27 December 2002 Retrieved 29 November 2017 Stocks Bloomberg News 42 Mbps RCom launches 3G services in 3 cities The Hindu Chennai India 14 December 2010 Archived from the original on 17 December 2010 Retrieved 8 March 2011 RCom slashes 3G tariff by 61 The Times of India 25 May 2012 Archived from the original on 26 January 2013 Retrieved 25 May 2012 RCom partners Lenovo to launch sub Rs 8 000 smartphone The Hindu 31 January 2013 Archived from the original on 28 May 2018 RCom kicks off migration process to upgrade CDMA subscribers to 4G LTE network Telecom Talk 2 April 2016 Retrieved 14 September 2016 Reliance Communications Posts Nearly 6 Rise in Q1 Profit NDTV Retrieved 14 September 2016 RCOM acquires Digicable in all stock deal The Times of India 1 July 2010 Archived from the original on 8 October 2013 Retrieved 6 October 2013 Reliance Communications acquires Sistema s MTS India in all stock deal Business Today Retrieved 6 September 2016 Reliance Communications gets CCI approval to acquire MTS NDTV Retrieved 6 September 2016 Sistema Shyam shareholders approve merger with Reliance Communications The Economic Times Retrieved 6 September 2016 DoT s approval for SSTL RCOM merger likely in Q4 Sistema The Economic Times Retrieved 6 September 2016 RCom gets Rajasthan HC approval for Sistema acquisition Business Standard Press Trust of India 30 September 2016 Retrieved 1 October 2016 Reliance Communication gets Bombay HC approval for Sistema acquisition The Economic Times Retrieved 8 October 2016 Pink slips for 600 as Reliance Communications trims fat The Economic Times Retrieved 5 May 2017 Telecom department approves RCom MTS merger The Economic Times Retrieved 18 November 2017 RCom Sistema Shyam merger gets DoT approval The Economic Times 23 October 2017 Retrieved 24 October 2017 Reliance Communications Completes Merger With MTS NDTV Retrieved 18 November 2017 Reliance Communications completes merger with MTS Zee News 31 October 2017 Retrieved 18 November 2017 RCom Aircel announce merger create fourth largest telco in India The Times of India 14 September 2016 Retrieved 6 October 2021 Pandey Piyush 14 September 2016 RCom Aircel merger a strong challenger to Idea Cellular The Hindu ISSN 0971 751X Retrieved 14 September 2016 Reliance Communications Gets SEBI Exchanges Nod For Aircel Merger NDTV Retrieved 20 March 2017 Reliance Communications gets Sebi nod for merger with Aircel Business Standard India Press Trust of India 15 March 2017 Retrieved 20 March 2017 RCom Aircel merger gets SEBI nod Business Line 15 March 2017 Retrieved 20 March 2017 RCOM gets CCI approval for Aircel merger India com Indo Asian News Service 20 March 2017 Retrieved 20 March 2017 Lead Telecom 20 March 2017 RCOM Aircel merger deal gets CCI approval Telecom Lead Retrieved 20 March 2017 Anil Ambani driven RCom Aircel shareholders approve merger ET Telecom ETTelecom com Retrieved 5 May 2017 RCom says Aircel merger to be completed by 2017 middle MTS merger by March Telecom Talk Retrieved 15 February 2017 RCom abandons mobile business merger with rival Aircel Financial Times Archived from the original on 10 December 2022 Retrieved 18 November 2017 Sengupta Devina 2 October 2017 RCom calls off Aircel merger blames legal uncertainties policy directives for delay The Economic Times Retrieved 2 October 2017 Raj Amrit 3 October 2017 RCom readies for fire sale of its assets to pare debt as Aircel merger fails Livemint Retrieved 2 October 2017 Trouble call A timeline of Reliance Communications versus Ericsson case Moneycontrol Retrieved 19 March 2019 www ETTelecom com RCom lenders to meet Jan 2 to consider asset bids ET Telecom ETTelecom com Retrieved 12 May 2020 Airtel Reliance 3 others may submit bids for RCom assets on Monday The Financial Express 24 November 2019 Retrieved 12 May 2020 External links EditOfficial website Retrieved from https en wikipedia org w index php title Reliance Communications amp oldid 1129793959, wikipedia, wiki, book, books, library,

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