In a clear signal that one of India most bitter corporate battles may be coming to an end, Mukesh Ambani-owned Reliance Industries Ltd. (RIL) is expected to team up with younger brother Anil Ambani’s Reliance Communication (RCom) in a bid to revolutionize 4G in India.
RIL is likely to use RCom’s access systems, fiber-optic backbone, international cable systems and Internet gateways to provide high-speed data services. This will be the first major collaboration between the Ambani brothers since the division of the Reliance conglomerate in 2005, according a company news release.
“After the termination of the noncompete agreement between the Ambani siblings in 2010, RIL re-entered the telecom industry. It acquired licenses for nationwide broadband services for $2.64 billion, the only company to do so,” the release said.
For the first phase of RIL’s foray into wireless broadband, it plans to lease around 26,000 towers from telecom power operators. The major source of its infrastructure will be contributed by Reliance Communications, the telecom industry setup by Anil Ambani. The partnership does not include any equity investments by RIL in Reliance ADA Group’s Telecom arm, RCom.
According the RIL, the RIL-RCom partnership will allow the former to carry data traffic on RCom’s pan-India 2.8 lakh fiber optic network, the largest in the sector. “Apart from using RCom’s towers, RIL intends to use the optic fiber network and transmission facilities such as national and international long distance networks to carry its data traffic. A finalized deal will enable RIL’s access to Reliance Communications’ 50,000 towers spread across 1,500 cities and towns in India,” the company informed.
RIL plans to offer data services at costs as low as 20 cents (U.S.) per gigabyte, as opposed to competitors’ price of $2.03/GB.
The companies will also work towards launching tablet devices at low prices. Currently, RCom sells a tablet for $264; representatives from both companies said the partnership aims to bring that price down to $122.
RIL has formed a core team to focus on this project. Most of the team’s members were a part of Reliance’s first telecom foray nearly a decade ago.
