India’s Reliance Communications (NSE: RCOM) and Reliance Jio reportedly plan to sign a 4G spectrum sharing agreement following a recent government decision allowing telcos to do so.
The pact will enable nascent operator Jio, which aims to launch…
India’s Reliance Communications (NSE: RCOM) and Reliance Jio reportedly plan to sign a 4G spectrum sharing agreement following a recent government decision allowing telcos to do so.
The pact will enable nascent operator Jio, which aims to launch services later this year, to access 10 MHz of contiguous 4G spectrum in 10 service areas: Mumbai, UP-East, Orissa, Madhya Pradesh, Bihar, Assam, Northeast, Haryana, Himachal Pradesh and Jammu & Kasmir, reported the Economic Times citing a person familiar. Contiguous – or continuous – airwaves are needed to deliver high-quality 4G services in the 800 MHz band, which has historically been used for CDMA services.
RCom, the fourth-largest mobile player, will have access to Jio’s 4G network in the ten circles with virtually no incremental capex costs, another source was quoted saying.
RCom, founded by Indian businessman Anil Ambani, declined to comment, while Jio, a subsidiary of conglomerate Reliance Industries, was not available.
Prior to signing a pact, RCom reportedly applied to the Department of Telecommunications (DoT) for permission to liberalise its 800 MHz airwaves in the ten service areas. This means it would pay a market-linked price to the government for the airwaves, which were not assigned at auction. The cost of liberalising the spectrum is in the Rs15bn-Rs18bn range, the report stated.
Jio, the first operator to hold a pan-India licence, spent nearly US$2bn at the country’s spectrum auction in March. However, the company reportedly has contiguous 800 MHz airwaves in just four of the ten circles, while RCom has continuous bandwidth in all of them.
The Union Cabinet announced Wednesday that telcos will be allowed to share spectrum in certain circumstances, subject to conditions. Only two operators will be permitted to share airwaves in a service area, and they must have spectrum in the same band: 2G, 3G or 4G.
