Saturday, June 12, 2010

Reliance Buys Infotel Broadband for WiMAX service in India

Reliance Industries Limited Entering into Broadband Market of India

Infotel Broadband Services Ltd won the auction for India’s Wireless Broadband Access (BWA), Reliance Industries Ltd (RIL) made a surprising move by acquiring 95% share in the company owned by the Nahata family. This will pit the Ambani brothers against each other in the telecom sector, which is permissible after the annulment of the non-compete agreement less than a month back.

Infotel Broadband is the successful bidder for all 22 circles at Rs 12,848 crore.
In the BWA auction, Aircel successfully bid for eight circles for Rs 3,438 crore. Bharti Airtel and Qualcomm Inc managed to corner four circles each. Eleven companies participated in the BWA auction for two bandwidth slots in the 22 circles. The BWA spectrum will make it possible to use hi-speed technologies like Wimax that is faster and more traversable than WiFi.

The latest move by Mukesh Ambani of RIL will place him in direct competition in the telecom sector with his estranged brother Anil Ambani of Reliance Communications, the country’s second largest mobile service provider. However, RCom had earlier pulled out of the BWA auction after it succeeded in the 3G auction of last month.
Wireless broadband internet services market in the country is expected to grow 100-fold in the next five years.

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