Mumbai, Jan. 18: Mukesh Ambani's Reliance Jio Infocomm today struck an agreement for spectrum trading and sharing with younger brother Anil Ambani's Reliance Communications (R-Com).
Under the terms of the deal, R-Com will trade CDMA spectrum in the 800MHz band in nine circles where Reliance Jio does not have the radiowaves.
In another 17 circles, the two companies will share spectrum.
The duo are also planning to enter into reciprocal intra-circle roaming arrangements.
The companies did not give the names of the circles for the trading of spectrum. Nor did they say who would pay the liberalisation fee.
It is learnt that R-Com may get Rs 4,500 crore by trading radiowaves with Reliance Jio, with the proceeds used to pay by this week the bulk of Rs 5,384 crore it owes to the telecom department as a spectrum liberalisation fee.
The balance amount will be paid from real estate deals.
Reliance Jio, expected to start commercial 4G services by March-April, holds 2300MHz spectrum in all 22 circles, which it acquired in 2010. It added 1800MHz in 18 circles and 800MHz in 10 circles. The 800MHz band will allow it to roll out 4G-LTE (long-term evolution) services.
An R-Com statement said the spectrum arrangements between the two companies would result in network synergies and enhanced network capacity, apart from optimising spectrum utilisation and capex efficiencies. It is also expected that both operators will get substantial savings in operating costs and future investment in networks.
R-Com's customers will benefit from access to Reliance Jio's nationwide 4G LTE network under the reciprocal sharing and roaming agreements.
The announcement failed to shield the shares of R-Com from broad market weakness. On the BSE, the scrip finished with losses of 3.22 per cent at Rs 70.70. The Reliance Industries share also sunk more than 5 per cent.
Reliance Jio today said it would raise Rs 15,000 crore through a rights issue to its existing shareholders.
The board approved the rights issue at a meeting held today.
"The board approved a further issue of 15,00,00,00,000 shares of Rs 10 each aggregating to Rs 15,000 crore to the existing shareholders," it said.
