Anil Ambani’s Reliance Communication (RCom) on Monday signed spectrum-trading agreement with Mukesh Ambani’s Reliance Jio Infocomm (RJIL) for 800 MHz licences in nine circles and also agreed to spectrum sharing in 800 MHz band across 17 circles.
The move is important as RCom is expected to receive Rs 4,500 crore from the spectrum-trading pact with RJIL as it needs to pay Rs 5,384 crore to the government by January 22 for liberalising the spectrum.
Spectrum liberalisation means the operators are free to trade in airwaves by paying a fee to the government, where the spectrum was not sold via auctions.
This is the second deal in this segment after Idea Cellular announced buying spectrum from Videocon in two circles at Rs 3,310 crore.
“With the Kolkata High Court last week granting a stay on the payment of one-time spectrum charge (OTSC) of Rs 1,569 crore vide a bank guarantee, today’s deal, coupled with the incoming Rs 4,500 crore, paves the way for RCom to pay the Department of Telecommunications’ (DoT) demand of Rs 5,384 crore and liberalise its 800-850 MHz spectrum holdings in 16 circles later this week itself,” a source said.
As part of the enhanced strategic collaboration, both companies also intend to enter into reciprocal Intra Circle Roaming (ICR) arrangements, said an RCom statement, adding that spectrum arrangements between RJIL and RCom will result in network synergies, enhanced network capacity and optimise spectrum utilisation and capex efficiencies.
Access to enhanced spectrum footprint in the 800 MHz band will complement RJIL’s LTE services rollout, providing increased network coverage and superior service quality while RCom’s customers will benefit from access to Reliance Jio’s nationwide 4G LTE network under the reciprocal sharing and ICR agreements.
Both operators anticipate considerable savings in operating costs and future investment in networks.
These agreements further strengthen the comprehensive framework of business cooperation between RJIL and RCOM, following the nationwide long-term IRU agreements for inter and intra city optical fibre networks, and for sharing of telecom tower infrastructure, said an RJIL statement, adding that the arrangements were subject to liberalisation of RCom spectrum in the 800 MHz band and obtaining the requisite approvals.
Besides, RCom had agreed to merge Sistema Shyam Teleservices (offering services under MTS brand) with itself, which will give the company access to MTS liberalised 800 MHz spectrum in eight circles and un-liberalised in one circle.
RCom is also in talks with Aircel for merger of its wireless business. Aircel has 2G spectrum in 19 circles, excluding Kolkata, Delhi, Mumbai and Chennai, and 3G spectrum for 13 circles and 4G spectrum for eight circles.
Meanwhile, Reliance Communications and the Tillman Global Holdings-TPG combine have extended by around 15 days their mutually exclusive talks for the latter to but the entire stake of the Anil Ambani-owned telco in its telecom towers unit. The parties had entered into an exclusivity agreement, which is valid till January 15, 2016.