Reliance seeks GSM spectrum

Category: Reliance | 1 Comment | Posted on June 12, 2006

Close on the heels of defense authorities agreeing to vacate 45 MHz quantity of spectrum by year-end, a crucial input for further growth of telecom services, CDMA operator Reliance Communications has approached the government seeking 4.4 MHz spectrum in 1800 MHz frequency to start GSM services in the country.

Last week, Reliance Communications had applied for GSM licences in the Mumbai and Delhi circles. It is said to be planning to apply for more circles across the country. According to the industry average, setting up full-scale GSM operations in Delhi and Mumbai will entail an investment of around Rs 2,000 crore.

The idea is to follow Chinese telco, China Unicom’s model which has presence in both CDMA and GSM segments.

Reliance officials confirmed that they had applied for licences in the Delhi and Mumbai circles. DoT sources confirmed the move but said no decision has yet been taken on allocation of spectrum.

Although CDMA is considered a spectrum-efficient technology, worldwide GSM technology has been adopted as CDMA operators are obliged to pay a hefty royalty to developers of CDMA technology. The royalty in India is as high as 7% each on equipment as well as handset compared to a miniscule two per cent in China and nil royalty in US, company sources said.

At present, Reliance operates GSM services Kolkata, West Bengal, Madhya Pradesh, Orissa, Bihar and North-East through its subsidiary Reliance Telecom, and has over 2 million GSM subscribers.

While big brother Mukesh is wedded to CDMA technology, Anil Ambani had been instrumental in setting up Reliance’s earlier foray into telecom through the GSM route.

Going by the subscriber base of nearly 20 million, it may be difficult for the company to migrate fully on to GSM operations immediately but this could become a possibility in case of lower additional investment over and above the existing network. The company has been talking to various GSM equipment vendors to look at various options.

The selection of the 1800 MHz frequency for further expansion is the “right decision

Comments

One Response to “Reliance seeks GSM spectrum”

1. Sridhar T Pai
   June 12th, 2006 @ 1:06 pm

   Veer

   I don’t believe it is possible for an operator in India to apply for a certain spectrum for a specific service and then use the same for something else. WPC clearly specifies the operator /service / location / spectrum applied for and so on before allocation is done.

   regards
   Sridhar

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