What is RIL going to do with the spectrum it acquired?

What is Reliance Industries going to do with the spectrum it has acquired? CNBC-TV18′s Siddharth Zarabi tries to find out details of what its strategy might be.

The initial estimate for capex is not expected to be as intensive as 3G. Preliminary estimates suggest Rs 6,000-7,000 crore depending on usage of existing technologies and the fact that there will be a lot of synergies with Reliance Communications’ existing telecommunications network.

It is expected to be a fast rollout, a data driven strategy across the country offering free and subsidised devices possibly harking back to Reliance’s original CDMA entry across the country five years back.

RIL plans to start with WiMax and progress to Long Term Evolution (LTE) over 2-3 years. Initial plan is for municipal wireless and then full city coverage, making it available freely across towns just like Google has done in San Francisco in the past. It plans to rollout Wi-Fi hot spots across 100 cities.

It is not going to be a holding strategy for spectrum according to RIL. It is probably going to be in a position to be able to offer services in select cities to start with between two to three quarters. The data cloud that RIL will be in a position to offer would be on a solid and robust physical infrastructure owned by Anil Ambani.

ADAG‘s statement today welcoming RIL’s entry is actually a clear hint in that regard.

Policy roadblocks:

Data, entertainment and voice possibilities exist via broadband wireless access. RIL has acquired a category ‘A’ ISP Infotel broadband.

Sources said the policy barring domestic voice over IP will need a relook. Internet service providers (ISPs) have been barred from offering domestic voice over IP since 2002.

Barring internet access, RIL is likely to pay a 6% annual revenue share.

Luring customers:

The company plans to address corporate and home user demand for data. It sees Wi-Fi phones and smart devices as key to customer adoption. Free or subsidised devices will also be key to faster adoption.

BWA ready:

Sources said the company’s entry into broadband will be big bang. RIL can be in a position to launch services in the next 2-3 quarters.

It is in a position to dominate broadband services market and has the potential to replace the VSAT services market.

RIL can hire fibre from Reliance Communications and others.

Well planned entry:

Sources said RIL’s broadband foray was planned over a year ago. Its broadband foray possibilities were discussed informally.

Source : Money Control

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Tags: ADAG, Infotel, RIL

Category: Stock-News