RIL- Infotel and RCom To Tie-Up For 4G Wireless Broadband Services

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8 Jun 2011
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Pan India Broadband Wireless Access (BWA) Spectrum winner Mukesh Ambani’s Reliance Industries (RIL) owned Infotel Broadband Ltd to tie-up with Anil Ambani’s Reliance Communication (Rcom) to revolutionize Long Term Evolution (LTE) based High Speed 4G Wirelss Broadband service in India.

For the first phase of RIL’s wireless broadband foray, it plans to lease around 26,000 towers from telecom power operators. The major source of its infrastructure will be contributed by Reliance Communications, the telecom industry setup by Anil Ambani. The partnership does not include any equity investments by RIL in Reliance ADA Group’s Telecom arm, RCom.

According to sources in telecom industry, RIL is likely to use RCom’s access systems, fiber-optic backbone, international cable systems and internet gateways to provide high-speed data services. This will be the first major collaboration between the Ambani brothers since the division of Reliance conglomerate in 2005.

After the termination of the non-compete agreement between the Ambani siblings in 2010, RIL re-entered the telecom industry. It acquired Infotel Broadband which has licenses and spectrum for nationwide 4G broadband services (BWA) for Rs. 13,000 crore, the only company to do so.

The RIL-RCom partnership will permit RIL to carry data traffic on RComs’ pan-India 2.8 lakh fiber optic network, the largest in the sector. Apart from using RComs’ towers, RIL intends to use the optic fiber network and transmission facilities such as national and international long distance networks to carry its data traffic. A finalized deal will enable RIL’s access to Reliance Communications’ 50,000 towers spread across 1,500 cities and towns in India.

RIL plans to offer data services at affordable costs to the common man. Both companies will also work towards launching tablet devices at low prices. Currently, RCom offers tablets at Rs. 12,999 a piece. Spokespersons from both the companies informed that the tie-up aims at bringing down the price to Rs. 6,000 a piece.

When Reliance Industries (RIL) was contacted with regards to the tie-up, an official spokesperson from RIL stated,” We had issued a tender and all tower and fiber companies had given their quotes. We have not decided anything so far.”
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