Mukesh Ambani's Reliance Jio dials in with unified licence

fe Bureau Posted online: Wednesday, Oct 23, 2013 at 0000 hrs
New Delhi : With Mukesh Ambani’s telecom firm Reliance Jio Infocomm bagging a unified licence, all eyes will be on tie-ups that it firms up with existing telcos. The industry will also eagerly watch to see if the company bids for the 900 MHz spectrum in the upcoming auctions in January or whether it acquires an incumbent operator.

A unified licence allows a licensee to provide a host of telephony services by acquiring spectrum from the market. Reliance Jio migrated to the new regime from having an internet service licence by paying Rs 1,673 crore mainly to provide voice services. However, it cannot immediately start providing voice services like other mobile operators like Bharti Airtel or a Vodafone do because currently there are no standard devices that can support voice services using the 2.3 GHz spectrum band, which Reliance Jio holds.

This band of spectrum can provide high-speed data services called the next-generation 4G services. However, the LTE technology Reliance Jio has opted for to provide these services is still in the process of developing an ecosystem for providing voice services.

The best the company can do is provide voice services from a personal computer or a tablet-like device to landline and mobile phones, which was earlier not allowed. However, telecom industry observers maintain that for an effective presence in the voice business the company will have to either buy an existing operator or build its own business by acquiring spectrum in either the 900 MHz (2G) or 2.1 GHz (3G) band.

Since the next round of spectrum auctions is slated for the 1,800 MHz and 900 MHz bands, the biggest question in the industry would be, would Reliance Jio bid?

Mukesh, who re-entered the telecom space in 2010 by picking up a 95% stake in Infotel Broadband for around Rs 13,000 crore after the firm emerged as the only one to bag spectrum for broadband wireless access in the 2.3 GHz band in all 22 circles, has consistently maintained that the business would be asset light based on a range partnerships.

Analysts point that the company has slowly started building assets so either acquiring an incumbent mobile operator or bidding for 2G/3G spectrum cannot be ruled out.

For instance, in April, Reliance Jio along with Telekom Malaysia, Vodafone Group, Omantel (Oman), Etisalat (UAE)and Dialog Axiata (Sri Lanka) signed a construction and maintenance agreement and supply contract for a submarine ‘Bay Of Bengal Gateway’ cable system. The undersea or submarine cable system will link Southeast Asia, South Asia and West East as well as Europe, Africa and East Asia.

Around the same time it also signed an agreement with competitor Bharti Airtel, which will provide data capacity on its i2i submarine cable laid between India and Singapore.

Though the Mukesh Ambani-controlled company has signed an inter-city fibre optic and tower sharing pact with younger brother Anil Ambani’s Reliance Communications, it has not ruled out building the same in future.

Recently, the company was awarded a facility based operator licence in Singapore that will allow it to buy, operate and sell undersea and terrestrial fibre connectivity, set up internet points of presence, offer internet transit and peering services as well as data and voice roaming services in the city state.