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Reliance Jio Infocomm pegs 4G investment at Rs 33,000 crore

Saturday, 19 April 2014 - 8:10am IST | Place: Mumbai | Agency: dna

Reliance Jio Infocomm, RIL's telecom arm, said on Friday that its employee base at its Dhirubhai Ambani Knowledge City (DAKC) at Navi Mumbai has swelled to 3,000 from 700 last year and the key leadership team involved in 4G pan-India launch is now in place.

As per sources, RJio is expected to roll out its 4G services this Diwali in 100 towns, and expand to 700 towns in the next two years. Services will include a mix of 2G voice and 4G data at competitive rates, as well as unique video and other content services available on 4G handsets, dongles and smart-cards.

According to RIL management, RJio's 4G investments are approximately Rs 32,000-33,000 crore. This includes pan-India BWA spectrum that it bought from Infotel in 2010 at a cost of Rs 12,848 crore, recently 1800 MHz spectrum at a cost of Rs 11,054 crore payable over a two-year period, and tower and infrastructure deals signed with Reliance Communications for Rs 18,200 crore. The deal valuations signed with Bharti and Viom Networks have not been declared.

Besides this, other costs include the 4G building in DAKC, field trials, testing, building and leasing network infrastructure costs, interest costs – considering the four-year delay in rolling out 4G services, staff expenses and other related costs, which are unlikely to provide any return on investment before the next two years.

Mukesh Ambani, chairman of RIL, also said RJio had finalised the key vendor and supplier partnerships that are required for 4G services, and is making rapid progress in building the critical infrastructure needed to launch the services.

As per industry sources, RJio has partnered with Samsung for handsets and hardware, Cisco for FTTH, Alcatel Lucent for wireline services, Ciena Networks for fibre-based dense wavelength division multiplexing solutions, Ericsson for optical fibre systems, and IBM for system integration.

RJio has also partnered with Reliance Communications, Bharti Infratel and Viom to rent out telecom towers and infrastructure for 4G. While RJIL has signed three strategic partnerships with Reliance Communications for 45,000 towers, 120,000 km inter-city optic fibre and 500,000 km intra-city optic fibre. RJio also signed a deal with Bharti Infratel (for an estimated 25,000-35,000 towers, as well as 8,000 km of inter-city and intra-city optic fibre, as per sources) and with Viom Networks for 42,000 towers.

In the February 2014 2G spectrum auctions, RJio acquired 1800 MHz spectrum in 14 circles across the country, which it plans to use for rolling out 4G services on the FDD-LTE band, along with its existing 2300 MHz BWA spectrum which it plans to use to roll out 4G on the TDD-LTE band, through an integrated ecosystem, which involves use of its pan-India unified license for voice telephony which the company was granted in October 2013 by the government, the management said.

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