Monday, November 8, 2010

RELIANCE proposes entry into 4G, excites LTE equipment industry

Mukesh Ambani controlled Reliance Industries' proposed entry into TD-LTE/4G-through the BWA spectrum auction-is set to excite the LTE equipment industry in India.Known for predatory pricing, the Ambanis will be looking at cost-effective rollouts across the country. This will put pressure on equipment vendors' pricing strategy.

Given the fact, that Reliance has been foremost in the country in coming up with predatory prices in terms of calling rates, handset rates at a time when tariff wars were unheard of in the country. The current market, which is ripe with opportunities, is also throwing many surprises, and might offer much with RIL entering with full enthusiasm into the telecom space.

Major equipment vendors such as Ericsson, Nokia Siemens Networks, Alcatel-Lucent, ZTE, Huawei, etc-duly supported by chip makers such as Qualcomm and ST-Ericsson-are already committed to developing LTE ecosystem for service providers and end users in India. Qualcomm and ST-Ericsson are already working on technologies that will allow consumers get access to 3G, GSM and LTE services using a single chipset.

Reliance is keen to share infrastructure with other players. BSNL and Reliance Communications could become potential partners. Infrastructure sharing will help in reducing capex.Considering the pan-India presence, the broadband mission of RIL will help in improving the broadband penetration in the country. RIL will be the only pan-India company to offer broadband services in all twenty-two circles. Aiming at acquiring at 100 mn customers within five years of its launch, the company is now focusing on ushering a broadband revolution in the country.

The company will be focusing on offering diverse data services and rich content. Commenting on the initiative, Mukesh Ambani, CMD, RIL said, "We see this as the next wave of value creation opportunity in the wireless broadband space. We believe this will pole vault India's economy into the digital world at an accelerated pace while creating next generation tools that will enhance productivity and create world-class consumer experience."

RIL will be deploying 15,000 base stations at a cost of $1.5 bn over the next three years. The auction for broadband licenses comes less than a month after a much larger auction for crucial 3G spectrum, which operators need to improve and roll out data intensive services to India's 600 mn cell phone users.The government is set to earn about Rs 39,000 crore from the auction of broadband wireless, which recently ended.

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