RIL drawing up plans to foray into telecom space

The board of Reliance Industries (RIL) is believed to have approved plans to enter the Indian telecommunications sector when the opportunity arises, two persons familiar with the development told ET.

India’s largest private sector company is expected to go for only the lucrative corporate bandwidth market, or the business of selling telecom and internet services to companies rather than individuals.

It is likely that the company could unveil its intent to foray into telecom at its annual general meeting on June 18, the people familiar with its plans said.

The government is currently auctioning frequency spectrum for broadband wireless access, or WiMAX, a technology that speeds up internet access and RIL is likely to set up a special purpose vehicle (SPV) to acquire one of the winners.

The RIL board met recently to endorse these plans, says a person who has seen a copy of the resolution passed at the meeting.

It is widely believed in industry circles that Mahendra Nahata-owned Himachal Futuristic’s arm, Infotel Broadband Services, could be a candidate for acquisition by RIL.

Infotel is currently among the bidders in the broadband wireless auction and is competing with the likes of Qualcomm, Anil Ambani’s Reliance Communications (RCOM), and Bharti Airtel, India’s largest telecom company by subscribers.

“Himachal Futuristic doesn’t have enough money of its own to be bidding,” said a telecom analyst with a domestic brokerage. Infotel’s bid is likely to be backed by Reliance Industries, he added.

Mr Nahata declined to comment on whether RIL or any of its arms intended to buy the company. The RIL spokesman declined to comment on the company’s future telecom plans.

The bid price for all-India spectrum was Rs 12,257 crore at the end of 110 rounds of bidding on Wednesday. Bidding for Delhi, Mumbai, Kerala and Himachal Pradesh is still on while there is a surplus spectrum slot in eight service areas. Nearly 37% of the bid amount for spectrum for all circles in India is from areas that are still under contest.



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