After the Central Government permitted spectrum sharing, Mukesh Ambani-led Reliance Jio Infocomm and Anil Ambani-led Reliance Communications (RCOM) will be signing an agreement together. The pact will let Reliance Jio to give out its 4G services on the spectrum band of 800 MHz in 10 regions.
The company will thus have access to 10 MHz of continuous 4G bandwidth in circles of Mumbai, Madhya Pradesh, Orissa, Assam, Uttar Pradesh-East, Bihar, Northeast, Jammu and Kashmir, Haryana, and Himachal Pradesh.
Spectrum sharing for RCOM
RCOM will also enjoy the privileges as it will get access to 4G network of Reliance Jio in the 10 regions. The company will have no incremental capital expenditures, virtually.
Gearing up for signing the spectrum pact, RCOM has given an application to the Department of Telecom to seek permission so that it may progressively liberalize its earlier spectrum of 800 MHz. These holdings were allotted to the company in the 10 areas without any government auctions. To liberalize the spectrum, the company will now have to pay the market-linked price to the government.
This liberalization may cost the company between Rs. 1,500 crore and Rs. 1,800 crore. If the company decides to liberalize all of its past spectra then the cost may be around Rs. 7,500 crores. But, RCOM will be liberalizing just a part of the spectrum for the period till the permit is valid.
Spectrum sharing for Reliance Jio
For Reliance Jio, it is important to convert its non-continuous airwaves in the 800 MHz band into continuous frequencies. This will let the company offer superior 4G services on this frequency. The frequency had earlier been used for CDMA services.
Reliance Jio won 49 units in the 800 MHz band in 10 regions. It spent Rs. 7,876.42 crore in the biggest spectrum sale in the country in March, this year. The company has continuous 800 MHz airwaves in four out of the ten circles. This includes Assam, Madhya Pradesh, Mumbai and Northeast. Reliance Jio is also on the lookout for offering a combined 4G network at higher frequencies in the 2300 MHz band. It won this band in the auctions held in 2010. Its lower bands like 800 MHz will help the company to cover a large area without the need of laying wires inside buildings.
Union Cabinet’s decision
On Wednesday, the Union Cabinet announced its decision to allow spectrum sharing between telecom operators. This will let optimum utilization of the airwaves. It will also enhance the call quality and drive the data speeds at lesser costs.
Spectrum sharing may be done among two companies in a single service area. Both the companies should have airwaves in the same band of 2G, 3G or 4G. The government has laid down certain restrictions on the use of technology while sharing the spectrum. Besides, it has also mentioned that non-auctioned spectrum may be shared with auctioned airwaves only after the difference in the market price is paid.
Summary
Post the Union Cabinet’s decision to allow spectrum sharing, Reliance Jio and Reliance Communications have decided to sign a pact for the same