Anil Ambani-led Reliance Communications will sell 800 megahertz (MHz) of spectrum in nine telecom circles to older brother Mukesh Ambani-led Reliance Jio Infocomm, and also share airwaves in 17 circles.
For customers of both operators, it could mean faster 4G internet speeds and less call drops.
The deal is expected help RCom pay Rs 6,953 crore to the Department of Telecommunications by January 22, 2016 for spectrum liberalisation in 16 circles — sharing spectrum with another operator — according to unified licence conditions.
Even as the companies work towards solving legal and financial issues, the telecom network of both are being synchronised, sources said.
“The spectrum arrangements between RJIL and RCom will result in network synergies, enhanced network capacity and will optimise spectrum utilisation and capital expenditure efficiencies. Both operators anticipate considerable savings in operating costs and future investment in networks,” a company statement said.
Post its agreement with RCom, Reliance Jio now has spectrum in the 1,800 MHz band (18 telecom circles), 800 MHz band (17 circles), and 2,300 MHz band (all 22 telecom circles). This is expected to boost the Mukesh Ambani-led company’s rollout of 4G services.
“Proceeds from spectrum sharing/trading deals would be used by RCom to pay the Rs 7,000-crore liberalisation fee for 800MHz spectrum and repay added debt,” a report by brokerage firm CLSA said.
“It is a good development in the sector. Spectrum will be used to its maximum potential, and customers will get better quality of servicesaid,” said Prashant Singhal, leader, telecom, E&Y.
In April 2014, Reliance Jio signed a deal with RCom to share the latter’s optic fibre infrastructure in around 300 cities and towns.
The deal between RCom and Reliance Jio is the second spectrum trading agreement after Idea Cellular’s pact to buy airwaves from Videocon in two circles for Rs 3,310 crore.