Mumbai, March 4: Mukesh D. Ambani took another step towards the launch of 4G voice and data services when Reliance Jio Infocomm Ltd, the telecom arm of Reliance Industries Ltd (RIL) signed a master services agreement with Bharti Infratel to utilise the latter’s telecom tower infrastructure.
Last December, Ambani had joined hands with Sunil Mittal to hammer out a comprehensive agreement that included the sharing of optic fibre network, submarine cable networks, telecom towers and Internet broadband services.
Both the companies had then said that the arrangement could be extended to roaming on 2G, 3G and 4G, and any other mutually beneficial areas and that it may also include jointly laying optic fibre or other forms of infrastructure services.
Under the terms of the arrangement, Reliance Jio will be entitled to use Bharti Infratel's 35,000 towers to launch its services in the country. It may also have access to the network (47,000) of Indus Towers in which Bharti Infratel has an equity interest of 42 per cent.
A press statement from Reliance Jio said the pricing would be at “arm’s length”, based on prevailing market rates.
“This agreement is in line with our earlier comprehensive telecom infrastructure sharing arrangement with Bharti Airtel Limited aimed at avoiding duplication of infrastructure, wherever possible, and to preserve capital and the environment. The agreement will help us with the faster roll out of our services across the country,” said Sanjay Mashruwala, managing director of Reliance Jio.
Reliance Jio has reportedly begun the first trial of its 4G services in Delhi, Mumbai and Jamnagar. The department of telecom has allocated 22 million numbers for the launch of services.
D.S. Rawat, CEO of Bharti Infratel Ltd, said Reliance Jio will get faster access to market at lower operational costs because of the vast footprint of Bharti Infratel’s telecom towers.
He added that the agreement would also benefit its existing customers as it would result in lower rentals and energy charges as a result of additional sharing.
Reliance Jio is the first telecom operator to hold pan-India unified licence. In July last year, it had announced that it would add 7,000 employees taking the total headcount at company to 10,000 in 2014-15.
The Mukesh Ambani company had surprised all in the February spectrum auctions by opting for the 1800MHz band rather than the more hotly contested 900MHz band. It won 394 blocks of 200KHz each in the 1800MHz band in 14 of the country’s 22 circles for a total bid amount of Rs 11,054.41 crore. Reliance Jio’s total equivalent spectrum footprint has increased from 440MHz to 597.6MHz after the February auction.
In contrast, Airtel had to pay Rs 19,644.72 crore for 23 blocks of 1MHz each in the 900MHz band in the three metro circles and 245 blocks in 11 circles in the 1800MHz band.
Reliance Jio is taking advantage of a technology advancements that will allow it to introduce 4G services in the 1800MHz band using FDD-LTE (frequency division duplex in long-term evolution). It will use TDD-LTE (time division duplex in long term evolution) in the 2300MHz band for which it won spectrum in the broadband wireless access (BWA) auction held in May 2010. It had won 20MHz of broadband spectrum in each of the 22 circles.
Reliance Jio’s grand plan is to offer seamless 4G services using FDD-LTE on 1800MHz and TDD-LTE on 2300MHz through an integrated ecosystem — which, it believes, will be superior to the services offered by its rivals.
FDD requires two separate communications channels, needing separate uplink and downlink spectrum channels.
TDD, however, uses a single frequency band for both transmission and receiving. It shares that band by assigning alternating time slots to transmit and receive operations. The communicating parties cannot tell that the transmissions are intermittent because of the high-speed nature of the data.