Global telecom equipment makers Ericsson, Alcatel-Lucent and Huawei are in the fray to supply broadband gear to Reliance Industries Ltd (RIL), India’s most valued company in terms of market capitalisation, for its re-entry into the sector.
In June, billionaire Mukesh Ambani-promoted RIL bought a 95 per cent stake in Infotel Broadband, the only company to win licence for broadband wireless spectrum in all the 22 circles, for Rs 4,800 crore.
According to telecom executives familiar with the matter, RIL is testing broadband equipment of the three vendors, based on long-term evolution (LTE) technology. “We expect the company to finalise the vendor in the next one-two months for broadband equipment and roll out the services in the next six-nine months,” said an executive at one of the three companies on condition of anonymity. To begin, RIL was likely to roll out the services in major cities, he said. However, it is still not clear whether RIL will choose a single vendor or split the order, according to sources. The size of the order could not be ascertained.
“RIL had indicated capital expenditure of $1 billion. Assuming a 70:30 ratio for infrastructure and equipment, the order size could be about $300 million,” said a telecom analyst with a domestic brokerage, who did not wish to be named. He expects RIL to choose more than one vendor for broadband equipment.
In November, RIL and Ericsson announced the result of their first field trial of LTE-TDD (time division duplex) mobile system technology, which showed peak rates of 80 Mbps (megabyte per second) in the downlink and 20 Mbps in the uplink. An email query to RIL remained unanswered. Alcatel-Lucent and Huawei did not reply to email queries.
P Balaji, vice-president, communications, corporate affairs & business development of Ericsson India, said, “The LTE trial with RIL Infotel was a proof of concept to demonstrate the speed and capabilities of the technology and Ericsson’s global expertise in this domain. We cannot comment on behalf of Reliance about their plans to roll out the services.”
In June last year, RIL had said it planned to invest $5 billion over the next two years in its telecom venture, which included broadband spectrum fee of about Rs 12,850 crore ($2.8 billion) paid by Infotel. Meanwhile, Tikona Digital Networks, which had won broadband wireless spectrum in four circles, has selected Alcatel-Lucent for broadband equipment based on LTE technology, according to telecom executives. Tikona and Alcatel-Lucent did not reply to email queries.