RCom invests Rs 1,600 cr in Mumbai, Delhi GSM op

Written by Corporate Bureau | New Delhi, Mumbai, Sep 28 | Updated: Sep 30 2008, 04:13am hrs
Reliance Communications Ltd (Rcomm) has commenced the soft launch of its GSM network across major cities including Mumbai, Delhi, Gujarat, Punjab and Southern states. The company has invested Rs 800 crore each in Mumbai and Delhi to set up 2,500 towers respectively in the two largest circles in the country.

The overall investment across India in GSM electronics alone is tipped to cross Rs 6,000 crore. The launch is slated to happen in 8-10 weeks after commencement of the soft launch. The Mumbai, Delhi circles went live on Sunday with close to 10,000 test GSM Sims to be issued to its employees. In the next stage of launch the company will get associates, vendors on the network for further robust testing. By the time of the launch close to 4-5 lakh test subscribers are likely to be on the companys GSM network.

In Mumbai and Delhi, Rcomm has set up GSM electronics on 2,500 towers each close to 30% more than the nearest rivals Vodafone and Airtel. Vodafone has close to 1,800 towers in Mumbai.

In order to provide zero call drop, no congestion services on its GSM network, Rcomm has also set up in-building solutions in over 500 buildings in Mumbai. The locations include airports, malls, cinema halls, commercial business districts.

Another 1,000 in building solutions would be added over the course of next 6 months based on the network load.

Likewise testing also commenced in cities like Bangalore, Ahmedabad, Surat, Lucknow, Ludhiana on Sunday. According to sources, Rcomms first phase of testing has commenced in cities which comprise of 45% of the Indian telecom subscriber base. The next phase would see soft launch in cities with another 35% of countrys subscriber base over the next 3-4 weeks and the rest 20% following within 6-9 weeks.

A similar Greenfield network being built by Rcomm would come at a recreation cost of $6-7 billion and take a gestation period of 18 months. Rcomm plans to close it in less than half the capex and time.

The commercial launch is to start by year end across 3,000 towns and going to 20,000 towns in a span of 6 months virtually adding over 125 towns and 1000 villages everyday on an average.

Rcomm is aiming to achieve a market share of 25% on launch of its nationwide dual network similar to its market share in current circles where it operates mobile services in both GSM and CDMA technologies.

However, telecom analysts add that though it would not be difficult for RCom to launch its GSM services, it will face tough competition in grabbing the high end subscriber base in metros.

Romal Shetty, telecom analyst with KPMG says, RCom already has its CDMA network in place and now needs to bring in just the additional base switching centers for the GSM rollout. But it will be difficult to grab the high end market unless the company brings in good services and branding.

According to analysts, telecom companies are now giants, unlike few years back and are therefore leveraging it by getting heavy discounts from the telecom equipment manufacturers by placing huge orders. When contacted Rcomm spokesperson confirmed that the network trials are on advanced stages and the commercial rollout is on the targeted schedule.