Another stitch in time for RIL
20 Feb 2013 10:28 PM GMT
With the Telecom Commission approving provision for companies holding internet services licences and broadband wireless access (BWA) spectrum to migrate to a unified licence (UL) for a fee of Rs 1,658 crores, the path has been cleared for Mukesh Ambani’s Reliance Industries Limited (RIL) to become the biggest player in the exponentially expanding and lucrative telecom sector. The additional fee that would allow the existing six players – Reliance Jio Infocomm (RJI), Bharti Airtel, Aircel, Qualcomm, Tikona Digital and Augere, who had won BWA spectrum in a 2010 auction – to hold the coveted unified licence and provide voice call services, effectively provides RIL, a relatively recent entrant, a freeway to capture India’s burgeoning telecom sector and create a digital superhighway connecting farthest corners of India. Ambani’s company RJI was formerly Infotel Broadband, which the RIL chief bought off for Rs 4,800 crore in 2010, thus not only acquiring the 22-circle pan-India licence for broadband services for a paltry sum, but creating a contiguous spectrum reach across the market, and erecting a formidable barrier for other players to breach.
As the 2G defaulters, who were unsuccessful in availing fresh 2G spectrum, such as Uninor, MTS, Videocon and Tata, were eliminated from the fray after the Supreme Court directed them to stop operations forthwith, Ambani’s stiffest competitors were duly shown the door. The licence issued to mobile telephony operators for Rs 1,658 crores had 4.4 MHz spectrum bundled with it, but the government’s decision to provide no spectrum with the unified licence is an interesting case in point. Mukesh Ambani has been upping his ante within the telecom sector for a while now, and gradually fortifying his 4G wireless network services, featuring an assorted mix of technologies ranging from the basic to the edgy. Ambani is also looking spend billions to ensure that his broadband infrastructure rolls out seamlessly. Acquiring a unified licence with no extra spectrum, in fact, empowers Ambani tremendously to forthwith dictate the terms of the enormous telecom sector, and also betrays the possibility of a heightened cartelisation of the market. In the light of these potentials, the sudden provision to shift to unified licence scheme seems tailor-made to suit his digital and telecom ambitions, as the government, once again seems to have modified the laws out of turn to facilitate RIL’s ever-growing aspirations. With India’s broadband penetration still woefully inadequate, and bundling it with mobile telephony certainly a cheap and effective way to meet this unimaginably enormous opportunity, Mukesh Ambani has once again managed to drive through the maladroit maze of heavy regulation with spellbinding skill and expand the network of profitability.
As the 2G defaulters, who were unsuccessful in availing fresh 2G spectrum, such as Uninor, MTS, Videocon and Tata, were eliminated from the fray after the Supreme Court directed them to stop operations forthwith, Ambani’s stiffest competitors were duly shown the door. The licence issued to mobile telephony operators for Rs 1,658 crores had 4.4 MHz spectrum bundled with it, but the government’s decision to provide no spectrum with the unified licence is an interesting case in point. Mukesh Ambani has been upping his ante within the telecom sector for a while now, and gradually fortifying his 4G wireless network services, featuring an assorted mix of technologies ranging from the basic to the edgy. Ambani is also looking spend billions to ensure that his broadband infrastructure rolls out seamlessly. Acquiring a unified licence with no extra spectrum, in fact, empowers Ambani tremendously to forthwith dictate the terms of the enormous telecom sector, and also betrays the possibility of a heightened cartelisation of the market. In the light of these potentials, the sudden provision to shift to unified licence scheme seems tailor-made to suit his digital and telecom ambitions, as the government, once again seems to have modified the laws out of turn to facilitate RIL’s ever-growing aspirations. With India’s broadband penetration still woefully inadequate, and bundling it with mobile telephony certainly a cheap and effective way to meet this unimaginably enormous opportunity, Mukesh Ambani has once again managed to drive through the maladroit maze of heavy regulation with spellbinding skill and expand the network of profitability.
Next Story
