Mukesh Ambani’s Reliance Jio Infocomm (RJIL) and Anil Ambani’s Reliance Communications (RCom) have signed a deal that will bring two highly selective frequency bands in India’s telecommunication space – 800MHz and 2100 MHz respectively together. This deal will bring the Ambani brothers closer than ever. Currently, their alliance is restricted to sharing towers and fibre-optic network.
This deal, which is going to be signed soon, will have enormous benefits for Reliance Jio. The newest entrant in India’s telecommunication sector, a subsidiary of Reliance Industries Limited (RIL) owns a pan-India 4G license. However, it faces challenges in the 2300 MHz and 1800 MHz spectrum bands that don’t offer high-speed data indoors. This problem can be solved by using Reliance Communications’ 800 MHz band. RCom has five MHz of 800-MHz spectrum in most circles across the country and currently, this spectrum is unused. After the spectrum is liberalised, it can be used for fourth generation (4G) long-term evolution (LTE) services, too.
An Edge in a Competitive Environment:
The telecom market is incredibly competitive in India. Many companies are vying for consumers’ business and possessing an advantage can give a brand the cutting they need to survive. As such, this deal with RCom will give Mukesh Ambani’s Reliance Jio roaming rights on RCom’s 2,100-MHz 3G band and offer services on this band. The roaming deal will bring Reliance Jio on a par with rivals who have an advantage in that they have spectrum across bands to offer seamless data and voice services. These rivals include two of the biggest players in India’s telecom sector – Airtel and Vodafone.
Reliance Jio, at the close of two auctions has spectrum in both, the 2300 MHz and 1800 MHz band. However, these aren’t ideally suited for 4G LTE data services, as telecom companies have to invest large sums in more towers for quality similar to that in a lower band. Having signed a deal with Anil Ambani’s Reliance Communications, it’s safe to say that this problem has been well and truly resolved. The respective companies of the Ambani brother declined to comment on this story.
A big reason this agreement could shape up the way it had was because of the stay the Telecom Disputes Settlement and Appellate Tribunal had removed regarding a similar deal inked by Vodafone, Airtel and Idea.
Reliance Jio and RCom have already signed a number of deals. These include deals to share inter-circle and intra-circle fibre optic networks, as well as towers. Under the tower deal, Reliance Jio can use about 45,000 towers of RCom across the country. For using the towers, Reliance Jio had promised to pay Rupees 12,000 crore for 10 years.