Mukesh Ambani and brother Anil Ambani are planning to expand their wireless airwave sharing pact to 9 circles, from the earlier 7 circles. This is because Reliance Jio Infocomm, a subsidiary of Mukesh Ambani’s Reliance Industries, is gearing up to roll out its Fourth Generation (4G) mobile phone services.
Reliance Jio’s Expansion of Spectrum
Reliance Jio is making an investment of around USD 15 billion to establish its service. The company had inked a deal with Anil Ambani’s Reliance Communications after the Central Government gave approval for spectrum sharing. Reliance Jio has now decided to incorporate two additional regions in the 800 megahertz (MHz) frequency band in this pact, within a few months. The company is waiting for regulatory approval, after which it will share airwaves with Reliance Communications.
The expanded spectrum space sharing between the two companies will be very important for Reliance Jio’s upcoming services. The airwaves, possessed by Reliance Communications are efficient for the transmission of high-speed data. These frequencies will give Reliance Jio the capability to allow users to transfer documents, movies, and audio, over the internet seamlessly.
An analyst from Phillip Capital India Pvt., Naveen Kulkarni said, “Reliance Jio’s business model and profitability is contingent on their getting access to frequency bands below 1,000 MHz.” He added that this provides a good opportunity to Reliance Communications for monetizing its spectrum as well.
It is expected that Reliance Jio’s 4G service will be very successful in a highly competitive market that caters to996 million subscribers.Most operators will rely on lowered tariffs and profit margins and Reliance Jio’s large pockets will help the company to overcome this. Last month, analysts from Barclays Bank, headed by Sahil Kedia, stated in a note that Reliance Jio is gradually heading in the right direction and adopting correct measures.
Spectrum Sharing Deal of Reliance Jio and Reliance Communications
The spectrum sharing deal with Reliance Communications, signed in August 2015, will help Reliance Jio convert its non-continuous airwaves in the 800 MHz band into continuous frequencies. This will further enable the company to offer a superior 4G experience to customers. The company had earlier bagged 49 units in the 800 MHz band in 10 circles. It had continuous 800 MHz airwaves in four out of the ten circles.
In the March spectrum auction, Reliance Jio made an investment of INR 7,876.42 crores. The March auctions are said to be the biggest spectrum sale in the country. Reliance Jio already has spectrum in 800 MHz, 1,800 MHz and 2,300 MHz bands.
At the Annual General Meeting (AGM) of Reliance Industries, held in June, Chairman Mukesh Ambani had announced that Reliance Jio would be officially launching its services in December 2015. A recent presentation from Reliance Industries revealed that April 2016 – March 2017 will be its first full year of commercial operations.