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RIL To Partner With RCOM For Network, Voice Services: Report

The rumor’s been around ever since Reliance Industries, the Mukesh Ambani controlled company which got 20 MHz of 4G spectrum after acquiring Infotel Broadband, and now The Economic Times reports it, citing two unnamed sources: the company is expected to partner with Reliance Communications, a part of the ADA Group for its 4G rollout, and get access to RCOM’s 50,000 towers across 1,500 cities and its 2.8 lakh kilometre pan-India fibre optic network. ET adds that there was a tender floated by the company to lease 26,000 towers, and the bid will most likely favor RCOM, though an RIL official has reportedly said that the deal is not done yet.

The report also indicates that RIL might bundle voice services from RCOM with its data offerings, and collaborate on selling cheaper devices.

Expected And Unexpected

RCOM has a large fibre-optic and tower network, it makes sense for RIL to leverage it for last mile connectivity. This had become more likely after the two brothers scrapped the old non-compete agreement and called for a truce in 2010 paving the way for each other to foray into businesses where one of them was already present including sectors such as power, telecom and financial services. There were reports that RIL was open to sharing network infrastructure with RCOM after the move.

However, the move to partner for bundling RCOM voice services would be an unexpected one. We feel that RCOM in a way will have an edge over other telcos since it will boast of access to a 4G network, even though it had earlier said that it would offer broadband wireless through 3G-ready pan India CDMA and maximum 13 circle 3G coverage and that it preferred LTE standard which offered a single evolution path for both, CDMA & GSM networks.

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But the thing with broadband spectrum is – you can have the services live, but you need a content and services strategy beyond voice to make people subscribe to it.

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