Reliance Infotel, the telecom venture of billionaire Mukesh Ambani, is strengthening its core team, while its rollout plan has gone back to the drawing board after the decision to not bid in the recently concluded auction for second-generation (2G) spectrum.
Reliance Industries Ltd picked a 95 per cent stake in Infotel Broadband for Rs 4,800 crore, soon after it won fourth-generation (4G) broadband spectrum in all 22 telecom circles in June 2010. It also agreed to pay an additional Rs 12,848 crore for the spectrum. It has five years to complete its rollout obligation.
This year, the company participated in a pre-bid conference for the 2G spectrum auction and it was speculated it would participate in the bidding.
For, only data service would not help it get a decent return on the Rs 17,000-crore investment made for broadband spectrum.
By analyst estimates, bundling voice with data would help it expand the addressable market manifold to $8 bn revenue, from the $750 mn data-only service would help it reach.
“The ecosystem for long-term evolution technology-based broadband wireless service is not mature and there is time to meet the rollout obligation,” said an executive at one of the vendors providing service to Reliance Infotel. “So, do not expect the company to be in a hurry.”
He, however, confirmed the company planned to “soft launch” the service, starting with Delhi and Mumbai, next year. “The equipment to install about 1,000 towers in both the cities have arrived and the process for selecting the sites has begun,” he said.
Meanwhile, it is building its core team and has hired Sumit Chowdhury as chief information officer (CIO), responsible for all systems, technology and the product platform. He moved to Reliance from IBM, where he was vice-president and partner. Chowdhury had earlier worked as CIO with Reliance Communications, the telecom company owned by Mukesh Ambani’s younger brother, Anil Ambani. Infotel has also got Arvind Rao, former managing director and chief executive officer of OnMobile Global, as head of innovation and platform.
Reliance Industries’ veterans Manoj Modi and Jitendra Thakkar are spearheading the rollout of the telecom business for the group. The company declined to discuss its strategy and comments on individual appointments.