Net Business To Be Widened

The Reliance group's agenda is not so much driven by a strategy to consolidate the power business, as it is to create an opportunity to expand its telecom and Internet businesses.

"The deal is structured to propel RIL into the largest league of convergence players, rather than an old economy petrochemicals company.

"Moreover, RIL has completed the current round of capital expenditure (in its petroleum refinery), and can freely focus on the emerging opportunities in the convergence sector," an analyst said, noting that "the BSES deal only clarifies their strategy. They will first put the infrastructure in place, before deciding what to feed into the pipelines." RIL will use the BSES assets to replicate its model in Tamil Nadu where it is setting up an internet backbone in association with WorldTel. Analysts said RIL get a one-shot access to BSES's retail base of 22 lakh customers in suburban Mumbai. A wholly owned subsisdiary, BSES Telecom holds an ISP licence, and it has already completed phase-I of laying an extensive optic fibre backbone over its transmission lines for providing broadband internet access. In the next phase, it has to tie up the last mile issues of actually reaching these services to individual households.