RCom to procure 7 million handsets for Rs 3,850 crore

In the run-up to roll out its GSM service, Anil Dhirubhai Ambani-promoted Reliance Communications (RCom) is planning to place a $770-million (around Rs 3,850 crore) order for procuring handsets. According to sources close to the development, the company plans to sell the GSM handsets bundled with their services. The company is expected to place orders for 7 million handsets.

RCom is understood to be in talks with handset manufacturing majors such as LG, Samsung and Motorola and expects to procure the handsets at Rs 4,000 apiece. The company will sell these bundled handsets primarily from its 2,500 retail stores and may use it as a part of its aggressive strategy to woo new customers.

A Reliance spokesperson, however, declined to comment on the development.

CDMA major RCom has earmarked $3 billion (Rs 15,000 crore) for its GSM services. Pan-India roll-out of its GSM services are expected to be completed by the middle of the next year.

RCom has received spectrum to operate GSM across the country through the dual technology policy under which existing CDMA players can also operate GSM services within the same licence.

Apart from Reliance, Tata Teleservices as well as Shyam Sistema has applied under the dual technology policy.

GSM services, which constitute about 75 per cent of the telecom, are a major attraction for the CDMA as well as new telecom players. CDMA operator Tata Teleservices is also expected to roll out its service by early next year.

Similarly, Shyam-Sistema, which recently launched their CDMA services, expressed interest in the GSM market.

With almost 10 million mobile subscribers added every month, the Indian telecom market is expected to reach 700 million subscribers by 2012. At present, the wireless subscriber-base stands at over 325 million, giving the telecom operators opportunities for growth and expansion.