GSM standard warms up Indian market, as Reliance announces country wide network

INDIA-TELECOM-RELIANCE-AMBANIIndian mobile giant Reliance Communications (RCom) has announced the launch of a nationwide enhanced GSM network that will cover over 1 billion people, the widest one-time launch. Reliance’s new network is expected to be activated within 5 days and offer seamless coverage on major railway routes, national and state highways through dedicated mobile towers, the network is connected to Reliance owned fibre network for unlimited capacity, both in India and internationally via its Reliance Global subsidiary. 

“In 2003, Reliance changed the face of the telecom sector in India”, said Mr. Anil Ambani, Chairman, Reliance Communications. “Through our nationwide GSM launch coupled with Reliance’s continued focus on our No. 1 CDMA network, we will once again endeavor to re-write the rules of the industry by offering our customers an unbeatable proposition across coverage, quality, service breadth, handset range and above all, value”.

It is envisaged that the GSM launch which will supplement RCom’s existing CDMA infrastructure, will not only help in adding additional net revenue subscribers, but also allow the carrier to garner a greater share of valuable GSM roaming revenues, as it battles with Vodafone Essar & Bharti Airtel alongside state controlled MTNL for market share in the burgeoning sub-continent market. MTNL has already “soft launched” GSM services in early December as previously discussed, Tata Teleservices will also be looking to launch GSM services in partnership with NTT DoCoMo as discussed in DoComo looks to India for growth.

The Department of Telecommunications plans to auction radio bandwidth, or spectrum, for 20 of India’s 22 telecom service areas electronically. A separate auction will be held for selling radio bandwidth for broadband wireless access, or Wi-Max, two days after the 3G spectrum auction. The government has set the starting auction price at $408 million for 3G radio bandwidth across India, with an expected minimum of 5 blocks being bought. 

India, the world’s second-largest mobile-phone services market after China, added more than 10 million subscribers for the third straight month in November and is set to attract more operators as it prepares to auction licenses for starting high- speed wireless services next year.

Telecom Regulatory Authority of India Chairman Nripendra Misra said in October, operators in the U.S., the U.K., France, Italy and Australia may bid for permits to offer the so-called third-generation, or 3G, services, further increasing competition.

RCom, which has a market capitalisation of $9.6 billion, is one of the few major telecom companies in India without a foreign partner. Earlier this year, Reliance & South Africa’s MTN Group failed to reach a deal in tie-up talks aimed at creating a top-10 global telecoms group. As of the end of November 2008, The operator had almost 60 million customers, while Bharti had 83 million and Vodafone’s Indian unit Essar had almost 59 million subscribers.

“We see no reason why we shouldn’t have a 100 million customers,” Ambani said.

Without a principal partner to assist in choosing & delivering GSM Value Added Services (VAS) to run across this new network, I feel that Reliance could well face an uphill struggle. However, in early December, there were rumours reported that up to 26% of the operator may become available as secondary shares. A potential suitor could be France Telecom who failed in a bid to acquire the Nordics Telia-Sonera last summer, they have a fair war chest available to them & I could see the Orange brand making an appearance on the sub-continent. Like the 3G situation in China, this will run & we will be sure to come back & look again as the story unfolds.

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3 responses to this post.

  1. [...] mobifone by Paul Harper Given the hype surrounding the recent 3G license awards in China and India, it was perhaps easy to overlook the award of 3G licenses in Vietnam this April. Vietnam, is set to [...]

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  3. [...] of sales come from outside the US. With recent advances in 3G licensing in Asia, notably Vietnam, India & China, Nokia (NYSE : NOK) looks well set to come out as the real winner from the mobile [...]

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