RCom-Aircel tie up to improve 2G coverage

Written by feBureau | Mumbai | Updated: May 1 2013, 09:16am hrs
Anil Ambani-promoted Reliance Communications (RCom) has partnered with another mobile operator Aircel for intra-circle roaming for GSM-based 2G services in eight circles. RCom said it is also in advanced stages of discussions with several other telecom operators for similar intra-circle roaming pacts for GSM 2G services.

Under intra-circle roaming pacts an operator having licence and spectrum can start services within a circle faster by using the network and base stations of another operator. For 2G services the government allowed intra-circle roaming by amending the licence conditions in 2009.

All agreements with existing telecom operators are likely to be completed by the end of the second quarter of this fiscal, the company said. These deals will increase RComs national 2G GSM network footprint by 10,000 base stations and bring in over 150 million customers, the company said. According to people in the know, the agreement with Aircel and the other intra-circle roaming pacts in the pipeline will help RCom save capital expenditure of R1,200 crore and operating expenses of R500 crore.

RCom is also in talks with a consortium of PE firms led by Samena Capital to sell a majority stake in Reliance Globalcom, which owns the undersea cable firm FLAG Telecom.

This agreement will expand RComs network footprint at no up-front cost. We believe that the timing for such alliances is just right, as the industry is now moving into consolidation mode, Rcoms president and chief executive officer (wireless), Gurdeep Singh, said.

Given this dynamic nature of the industry, it is inevitable for operators to consider such arrangements with each other, Aircels COO Kaizad Heerjee said.