Reliance Telecom Signs Licence, Interconnect Pacts

Reliance Telecom yesterday signed licence and interconnect agreements with the department of telecommunications (DoT) to build and operate basic telecom services in Gujarat. The company paid over Rs 97 crore as its first years licence fees.

The licence is valid for 15 years. Reliance Telecom will pay a total of about Rs 3,400 crore over this period. The companys bid was marginally more than the Rs 3,300 crore set as the reserve price by DoT for the circle.

Group flagship Reliance Industries holds 90 per cent of Reliance Telecoms equity, while the remaining 10 per cent is held by US-based Nynex. The companys service area will include the whole of Gujarat and the Union territories of Dadra & Nagar Haveli and Daman & Diu.

 

The Gujarat basic telecom project is expected to cost upwards of $1 billion (approximately Rs 3,600 crore). Reliance Telecom proposes to directly employ 4,000 people and provide indirect employment to another 10,000. The company has been aggressively hiring personnel for the project in the last few months.

Reliance Telecom is in the process of shortlisting equipment suppliers to the project after floating a request for proposals from equipment vendors. The company proposes to start service in Baroda, Ahmedabad, Surat, Jamnagar and Rajkot by the end of this year, a company press release said.

Reliance Telecom is the second company to sign the basic telecom licence and interconnect agreements after Bharti Telenet, the letter of intent (LoI) holder for Madhya Pradesh, which signed the pacts on February 28.

Three other companies holding LoIs Tata Teleservices (Andhra Pradesh), Essar Commvision (Punjab) and Techno Telecom (in Bihar) are expected to sign the agreements soon.