The Hindu : Business : RCom rolls out GSM operations

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Wednesday, Dec 31, 2008
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Business

RCom rolls out GSM operations

Ramnath Subbu

Reliance customers will be able to roam on more networks globally now

Coverage will be doubled in the next few months
To participate in the 3G spectrum auction

— PHOTO: PAUL NORONHA

Wider reach: Anil Ambani, Chairman, Reliance Communications, addressing a press conference in Mumbai on Tuesday.

MUMBAI: Leading CDMA mobile telephony player Reliance Communications Ltd. (RCom) on Tuesday announced the roll-out of its much-awaited GSM mobile telephony operations from December 31 across the country.

A culmination of the Rs. 10,000-crore investment programme undertaken by the company, the roll-out will happen in 11,000 towns and 3.40 lakh villages across the country through 2,000 exclusive stores and over one million retailers.

RCom received the spectrum allocation for GSM operations only in January 2008 and in launching the GSM services, it has set a record in terms of speed of roll-out.

Ahead of schedule

“We are at least six months ahead of schedule. We have achieved in 15 months what other operators have taken 15 years to achieve,” said Anil Ambani, Chairman, Reliance Communications, while addressing the media here.

Mr. Ambani said the company would double its GSM coverage in the next few months extending to 24,000 towns and six lakh villages, covering one billion people and involving an investment of a “few more thousand crore. We will also soon cover all railway routes and National and State Highways.”

The CDMA network of the company now spans more than 20,000 towns and 4.50 lakh villages and has some 60 million subscribers across the country. However, seven out of ten new customers entering mobility were in the GSM space. The GSM network would complement the company’s CDMA network and offered the customer more choice, said Mr. Ambani adding that with this investment, the company was nearing the end of its capital expenditure cycle for the CDMA and GSM operations.

The company will participate in the 3G spectrum auction programme in 2009 and has earmarked Rs. 2,000-4,000 crore for its 3G services launch.

With the launch of GSM operations, Reliance customers will have a range of over 250 handsets and devices to choose from and will be able to roam on more networks globally in more than 200 countries. Reliance is already the leader in value added services (VAS) and going forward, “10-20 per cent of our revenues will come from VAS not considering SMS and P2P services.”

The operating profit margins in the mobility space are in the range of 35-40 per cent but, according to Mr. Ambani, by end-2009 the competitive landscape will become more intense as new operators will come in. The tower business, where other operators use its infrastructure as tenants, is under RCom subsidiary Reliance Infratel.

“We are now swamped with orders as newer entrants and those wanting to enter the 3G and WiMax space need access to infrastructure to become national players.”

As regards plans for an initial public offering (IPO) for Reliance Infratel, Mr. Ambani said, “in 2009, as things hopefully improve and as we move to getting more GSM players as tenants, it will further improve Reliance Infratel’s valuation. We will then look at raising capital.”

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