Finally! Mukesh Ambani and Anil Ambani joining hands

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Finally! Mukesh Ambani and Anil Ambani joining hands
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Reliance Communications (RCOM) and Reliance Jio Infocomm is going to sign a pact that will enable the Mukesh Ambani-owned telco to offer fourth generation (4G) services over the 800 MHz band across 10 circles in India.

The central government has allowed sharing of airwaves between telecom companies, a move that would help in more efficient use of the scarce natural resource while improving quality of calls and data speeds, and possibly lower tariffs.

Both the companies will benefit from the deal. The pact will allow Reliance Jio to access 10 MHz of contiguous 4G bandwidth in 10 circles, said a person familiar with the matter.

At the same time, India's fourth largest mobile carrier, RCom, too will benefit as it will gain access to Jio's 4G network in the 10 circles - Mumbai, UP-East, Orissa, Madhya Pradesh, Bihar, Assam, Northeast, Haryana, Himachal Pradesh and Jammu & Kashmir - at virtually zero incremental capex costs, another person said.

In the run up to inking the spectrum sharing pact with Jio, Anil Ambani-owned RCom has applied to the telecom department (DoT) for permission to progressively liberalise its old 800 MHz spectrum holdings in all the 10 circles that were originally assigned without auctions at government-set prices, the first person said.
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Liberalise, here means, paying market-linked price to the government for spectrum which wasn't auctioned.

RCom's spectrum liberalisation cost is pegged in the Rs 1,500-to-1,800 crore range. If RCom were to liberalise all its earlier spectrum holdings at once, it could have cost about Rs 7,500 crore.

But as all the airwaves don't need to be liberalised and even the portion that is required will be liberalised only for the balance duration of the permit, the outgo will be less.

Conversion of non-contiguous airwaves in the 800 MHz band into contiguous or 'continuous' frequencies is critical for Reliance Jio for delivering top-grade 4G LTE services on this frequency, which has been historically used for CDMA services.

Reliance Jio had acquired 49 units in the 800 MHz band across the 10 circles at a cost of Rs 7,876.42 crore in India's biggest spectrum sale in March.
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It is important to note that spectrum sharing would be allowed only between two carriers in one service area, where both the licensees have airwaves in the same band — 2G, 3G or 4G.

(Image: Indiatimes)