Mukesh Ambani may tie up with Anil Ambani to run a Telecom Venture

News regarding the telecom industry is a daily occurrence these days. India represents a phenomenal opportunity for every major telecom player and it’s no surprise why, with over a billion people, there’s an incredible opportunity for growth. As such, some of the most ambitious moves in the industry are being made by Mukesh Ambani’s Reliance Jio Infocomm Limited (RJIL).

India’s newest entrant, RJIL is a subsidiary of RIL and has invested over Rupees 70,000 crore for licenses, infrastructure and other resources that will serve as the backbone of India’s first fourth generation (4G) network. One of the key aspects about Reliance Jio has been the deals inked with many other telecom companies such as Bharti Airtel & Anil Ambani’s Reliance Communication. In fact, Mukesh Ambani signing a deal with his younger sibling, Anil Ambani raised a lot of eyebrows. As such, news regarding a possible collaboration between the Ambani brothers is the latest to hit the already booming telecom sector. They may have had their differences in the past and the brothers might be controlling two of India’s biggest telecom companies, but it seems they would have no problems in functioning as one, by entering into roaming or spectrum sharing pacts once rules permit, after having tied up for sharing infrastructure such as towers and optic fibre.

Many experts in this domain feel that future areas of cooperation between Mukesh’s Reliance Jio Infocomm and Anil’s Reliance Communications (RCOM) could entail maintenance and servicing of infrastructure, common network operating centres, data centres, content and retail outlets, apart from intra-circle roaming agreements involving RCOM’s CDMA (800 MHz) and 3G (2100 MHz) bandwidth and Jio’s 4G (2300 MHz) spectrum. The most important thing to note is that upon combining forces, the Ambani brothers will command 2G, 3G and 4G airwaves in India. From the financial perspective, the two companies could benefit from an expanded network with shared capital and operational expenditure over the remaining part of its licence period.

Buying spectrum and infrastructure in areas of gaps for the two firms will obviously prove much more expensive than tying up with one another, especially once bandwidth sharing and trading are allowed, say analysts.

The new government has already liberalised use of airwaves for any technology. So, for example, 800 MHz spectrum, which till now was used only by CDMA operators, can now be used to offer 4G services as well if the airwaves were bought at market price.

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