Reliance Industries Limited (RIL) owned by MukeshAmbani, has signed a deal worth Rs 12,000 crore for setting up its telecom infrastructure. The biggest catch of this deal is that RIL joins hands with Reliance Communications (RComm) to use the latter’s network for Reliance JioInfocom.
The telecomm arm of RIL will lease up to 45,000 mobile masts from RCommas per a contract which is not bound by any fixed timelines. According to RIL spokesperson this deal has no fixed length. Reliance JioInfocom has been under focus since it is launching the country’s first high speed and voice data services over fourth generation (4G) telecom network. With this deal, the company gets hold of a nationwide already existent network of rooftop towers which will accelerate the speed of the launch.Reliance JioInfocomm is the sole winnerof the 4G-spectrum license in the year 2010. Both the companies will derive major benefits from sharing of capital and operating costs. This deal will help Jio’s launch with its services faster, probably within a year, since RComm is one of the companies with maximum network penetration. In this deal, RComm will be duly benefitted as it will get an estimated Rs 1,000 crore rental income each year.“This is going to be a positive for Reliance Communications as it opens a new source of revenue for them. It’s also good for Reliance Jio because they are getting ready infrastructure and the big benefit is that there is no upfront investment in building infrastructure,” said KK Mittal, head of portfolio management at Globe Capital Market.
The company will have to install its equipment on 45,000 towers that will offer 4G services and have downloading speed of about 100 MBps. This is the second deal amongst the two companies. The former agreement was about fibre optic cable network sharing which cost RIL around Rs 1,200 crore.
Recently, at the annual general meeting of RIL, MukeshAmbani said that an ambitious plan has been charted out for Reliance JioInfocomm. In the coming year, the company will also increase its headcount from 3,000 to 10,000.“We have also finalized the key vendor and supplier partnerships that are required for the initial launch of our services,” Ambani said. Reliance JioInfocomm is set to change the current trend of telecommunication industry in the country.“These highly anticipated services will change the lives of 1.2 billion Indians,” added Mr.Ambani.