RIL Might Bid For Telecom Spectrum

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New Delhi: Reliance Industries is likely to bid for mobile telephone spectrum in the upcoming auction to complement its wireless broadband services with voice call facility.

The oil-to-textile group headed by billionaire Mukesh Ambani is making a re-entry into the telecommunication business and is being talked as the most aggressive bidder in the November auction of telecom spectrum.

Sitting on a cash-pile of Rs 70,732 crore at the end of the June quarter, RIL was the most notable participant at the pre-bid conference organised by the Department of Telecom (DoT) in the run-up to the auction.

RIL is most likely to put a direct bid, a source privy to the development said. If for some reasons it is unable to make a bid by itself, the company may fund purchase of spectrum by another company and then acquire it.

A company spokesperson declined to comment on speculation about the issue.

The company had in 2010 re-entered the telecom space after it acquired Infotel Broadband which had won pan-India spectrum for offering high-speed internet broadband.

The pan-India spectrum that RIL holds through Infotel Broadband does not has permission to provide voice calling facility.

Any spectrum that does not allow voice calls is not a big revenue earner and so RIL as the next logical step would want to acquire spectrum which it can bundle its high speed mobile broadband service, the source said.

The government plans to begin auction of spectrum vacated from cancellation of 122 telecom licenses by the Supreme Court, from November 12.

The source said representatives of RIL subsidiary Infotel Broadband have been attended meetings organised by Department of Telecommunications on proposed spectrum auction.

RIL entered in to telecom business by acquiring Infotel Broadband on the day the later won pan-India airwaves frequencies for Rs 12,847.71 crore in 2010.

The company has already revealed its plan to use LTE technology for its country wide network deployment but is yet to start its services.

Government has plans to auction airwaves frequencies in 1800 Mhz band and 800 Mhz band which are being currently used for GSM and CDMA mobile telephony services respectively.

A new player bidding for 1800 will have to pay minimum of Rs 14,000 crore for pan-India services and for 800 Mhz band it is Rs 9,100 crore.

According to auction rules, for 1800 Mhz band, new entrants will be required to bid for minimum of 4 blocks each of 1.25MHz in each service area and for 800 Mhz band it is minimum of 2 blocks each of 1.25MHz in each service area.

RIL has plans to provide digital services in key domains of national interest such as education, healthcare, security, financial services, government-citizen interfaces and entertainment.

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