Reliance Communications, Jio announce spectrum accord

The communications services companies of the two Ambani brothers on Monday announced agreements for trading and sharing of scarce airwaves, or radio frequency spectrum, in the 800 MHz band, covering virtually the entire country. A roaming agreement is also on cards.

The agreement for trading involves a change in spectrum allotment from the Anil Ambani-led Reliance Communications to Mukesh Ambani-led Reliance Jio over nine circles and that for sharing between the two companies covers 17 circles, the two entities said.

"The spectrum arrangements between Reliance Jio Infocom and Reliance Communications will result in network synergies, enhanced network capacity and will optimise spectrum utilisation and capex (capital expenditure) efficiencies," the companies said in separate statements.

"Both operators anticipate considerable savings in operating costs and future investment in networks."

The statements said the customers of Reliance Communications will benefit from the access to Jio's nationwide 4G network under the reciprocal sharing and roaming agreements. Similarly, the additional spectrum will enhance Jio's network coverage.

Reacting to the development, Rajan S. Mathews, director general of the Cellular Operators' Association of India, told IANS: "We expected a consolidation to happen in this sector. This is in line with that. It is a normal phenomenon. Consolidation is good."

According to sources, Reliance Communications has a presence in all the 22 circles in the 800 MHz space, with a total of 113.75 MHz, out of which 33.75 MHz will go to Jio. This will leave the Reliance Communications with 80 MHz, but with an option to share the airwaves under various agrfeements.

In addition to its pan-India spectrum in 2,300 MHz and 1,800 MHz in 14 circles, Jio invested over Rs.10,000 crore in last year's auctions to acquire 800 MHz spectrum in 10 circles and 1,800 MHz spectrum in six circles. The cumulative investment in airwaves came to Rs.34,000 crore.

As regards, Reliance Communications, it strengthened its spectrum portfolio by acquiring airwaves of 5 MHz or more in the 800/850 MHz band in the auctions of March last year, thereby increasing the holding from 12 circles earlier to 21 circles.

Two other significant developments will have a bearing on the agreement signed on Monmday -- the plans of Reliance Communications to buy rival Aircel from Malaysia's Maxis Communications, and Sindya Securities, as also Russia's Indian telecom arm Sistema that operates under the "MTS" brand.

According to sources, if these two deals happen, RCom-Aircel-MTS wireless combine will have over 150 million customers in India and hold close to 20 percent of the total spectrum -- highest in country -- in virtually every band currently available to private players and every circle.