Dalal Street sees hint of Mukesh Ambani’s return to voice telephony

The draft New Telecom Policy (NTP) may have come as a piece of good news for all wireless broadband players but it holds more for the Mukesh Ambani-led Reliance Industries’ telecom venture than anyone else, according to analysts.

The policy comes at a time when RIL is in the midst of drawing up an ambitious plan of rolling out its broadband services across India — as DNA reported on Tuesday.

For some time, there had been a question mark on spectrum availability in certain service areas, which would have limited senior Ambani’s plans to offer pan-Indian wireless internet service.

The NTP has taken care of this with its provision that would permit sharing, pooling and trading of spectrum.

Nilesh Banerjee and Vikas S Jain, analysts with Goldman Sachs, said the pooling and trading of spectrum can allow RIL to have a larger telecom presence despite its late entry than would be possible from wireless broadband business alone.

They expect the company to include voice-based services — either through VoIP (voice over internet protocol) or a cellular network — along with data services.

“We believe RIL will look at voice-based services since the Ebidta (or operating profit) margin of a data-only operator is low, typically 15%-25%,” they said in a note on Wednesday.

Even though RIL has not come out with any timeline for the launch of its broadband services, Banerjee and Jain hint in their Wednesday note this could be during April-June next year.

Queries mailed to RIL did not elicit a response. A spokesperson said the company does not respond to market speculation.

Meanwhile, smaller rivals such as Augere Wireless Broadband India, a wholly owned subsidiary of The Netherlands-based Augere Holdings BV, are set to enter the market by then.    

Augere is beginning its pilot project in Madhya Pradesh and Chhattisgarh this month and soft launch by February next year, with full services expected to be rolled out in early April.

But Augere CEO Lars Stork confessed at a press conference in New Delhi on Tuesday that he was nervous competing with RIL, “which had both financial and marketing muscle”.

Deepak Puri, the founder of Moser Baer, and his family have a 26% stake in Augere Wireless.

Experts said Ambani can be expected to spark a price war - as he did when he launched Reliance Infocomm mobile services in 2004 with his predatory ‘Ab kar lo duniya mutthi mein’ plans.

“While the ministry’s recommendations are likely positive for RIL’s telecom ambitions, pricing and execution of the product offering would be critical for the impact on the sector as well as on RIL’s profitability,” Banerjee and Jain wrote.