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RIL to rope in strategic partners for telecom biz

india Updated: Jul 27, 2010 19:31 IST

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Corporate giant Reliance Industries on Tuesday said it will rope in several strategic partners for its telecom business from among leading global service providers, as also device manufacturers and technology firms.

Hinting that its telecom offering would be low-cost in nature, the company said that it would follow "an asset light strategy" for the business, which it entered last month through the acquisition of 95 per cent stake in Infotel Broadband Services Pvt Ltd.

Infotel is the only private player to have pan-India Broadband Wireless Access (BWA) in all 22 circles.

"RIL sees the broadband opportunity as a new frontier of knowledge economy, in which it can take a leadership position and provide India with an opportunity to be in the forefront among the countries providing world-class 4G network and services," the Mukesh Ambani-led behemoth said in a statement.

Announcing its quarterly results, the company further said today: "RIL will forge several strategic relations (in the telecom space) with a host of leading global technology players, service providers, infrastructure providers, application developers, device manufacturers and others to leapfrog India to the 4G revolution."

On June 11, Infotel emerged as the winner for pan-India BWA spectrum for Rs 12,872 crore, and on the same day, RIL announced acquisition of 95 per cent stake in the company for Rs 4,800 crore.

RIL said further that it "plans to create world class state-of-the-art technology using an asset light strategy."

It had previously hinted at services being provided at ultra-low costs, as the group had done with the mobile services business when Reliance Infocom started business under the fold of an undivided Ambani family.

A day after the Infotel buyout, RIL had said that the non-availability of "affordable devices" was a key constraint for growth in this segment, and it was imperative to "promote subsidies for institutions and educational segment."

At the same time, RIL had also said that no other private operator had enough spectrum assets to match its capacity.

"None of the private operators has spectrum assets that would match the capacity of pan-India 20 MHz BWA spectrum," Reliance Industries had said at that time, while claiming to have a "decisive competitive edge due to significantly high data speed compared to 2G and 3G networks".

RIL's Infotel acquisition had come days after it announced the scrapping of the non-compete agreement with Anil Ambani group in most businesses.

In May 2010, Anil Ambani group's RCom paid Rs 8,585.04 crore for 3G spectrum in 13 circles, including Delhi and Mumbai. Other telecom operators that won 3G spectrum included Bharti Airtel, Vodafone, Idea and Tata Communications.

RIL sees significant market potential as less than 5 per cent cellular subscribers use wireless broadband, and it is the only private operator with a pan-India spectrum.