Huawei bags RCom's $600 Mn GSM contract

By SiliconIndia   |   Wednesday, 23 January 2008, 13:15 Hrs
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New Delhi: As part of its nationwide GSM rollout plans, Reliance Communications (RCom), an Indian telecom company, will award a contract for electronic equipments to Huawei, a Chinese telecom network company. The contract, valued at about $500 to 600 million, is for the 14 circles for which the telco recently received GSM spectrum, reported The Economic Times.

Though a formal announcement is yet to come, sources said that advanced negotiations went on over the past weekend and the announcement on the contract is expected shortly.

The equipment deal between Rcom and Huawei would be the first nationwide GSM rollout contract for electronics. Rcom plans to invest over $1.5 billion (Rs 6,000 crore) in electronics alone under its GSM rollout plans.

RCom got GSM licence in December 2007 and the department of telecom (DoT) allotted it spectrum for 14 circles early this month. The move came amidst the opposition from Cellular Operators? Association of India (COAI), a body of GSM operators, against the allocation of dual-technology operations. And COAI is currently involved in a legal battle with the telecom department over the same.

RCom has been allotted 4.4 MHz of start-up spectrum in the 14 circles by DoT. Reliance already offers GSM services in the remaining eight circles through its wholly owned subsidiary Reliance Telecom.

Almost three years back, RCom had floated the tender for 80 to 100 million GSM lines, valued at around $6 billion. The order, which will have both 2G and 3G components, is likely to be finalized in the next few weeks.

RCom will roll-out GSM services in the 14 circles within the next couple of months and is expected to offer tariffs that are up to 30 percent lower than the prevailing GSM call rates.

The contract comes as a victory for Huawei too. The Chinese telecom network major had earlier lost out on the BSNL tender for 45.5 million GSM lines.

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