Reliance Info In Rs 2,500 Cr Deal With Samsung, LG For WLL Sets

Mumbai, December 23: | Updated: Dec 24 2002, 05:30am hrs
Reliance Infocomm has signed up a mega deal with Korean giants LG and Samsung for import of six million code division multiple access (CDMA) sets for its Wireless in Local Loop (WLL) service, which is to be inaugurated on Friday. The deal is valued at Rs 2,500 crore, or about $500 million.

Confirming this, top sources told FE that the handsets would be arriving from next week.

The Reliance gameplan is clear: flood the market with CDMA sets and ensure easy availability. According to sources, the deal with LG and Samsung is to ensure that the sets are available on tap, so that there is no crisis of availability when the need arises.

We will give the companies notice for supplies, based on demand. But the contract entails the import of six million sets in all, sources explained. They said Reliance Infocomm would gauge initial demand levels immediately after the launch, and begin the process of getting the handsets in.

The extent of Reliance Infocomms aggression as far as its limited mobility foray is concerned can be gauged from the fact that the entire GSM or cellular phone user base is estimated at about nine million, with about 42 million land line users in all.

With the import of six million CDMA sets, Reliance Infocomm is obviously expecting enough demand to cause a major flutter in the marketplace.

The handsets, the sources said, are valued at anywhere between Rs 5,000 and Rs 15,000 apiece, depending on features customers would want. Giving tough competition to existing players is the name of the game. But we want to ensure the best deal for customers, a source associated with the exercise said, adding that with the proposed 20 paise per minute charges, it was seeking to generate enough heat in the market.

A user can call anywhere from jute mandis of the east to the markets of western India for 20 paise, the sources explained. Reliance is also proposing to go in for an exchange offer, where cellphone users can swap their old handsets for CDMA sets. The old handsets would then be exported to China, for which it has tied up with a Chinese firm.

The company has signed up as many as 9000 dealers for the service, and 2,500 employees, who would fan out and hawk the WLL service. The infocom initiative from the Reliance stable, its biggest retail foray yet, will see other services like a slew of webstores countrywide serving up state-of-the-art Internet facilities and operating as business centres for travelling businessmen.

Reliance Infocomms limited mobility initiative will be unveiled on Friday at Thane, near Mumbai, by information technology minister Pramod Mahajan.

The initial rollout will entail taking the service to as many as 104 cities with the number finally settling at 600 by January-February. Thereafter, the company will focus on its fixed line services, from April 2003.