Reliance Communications to invest $1 bn for 3G rollout

Anil Ambani’s Reliance Communications (RCOM) has set aside $1 billion for its 3G (third generation) telecom services rollout. The approximately Rs 4,700 crore investment in 3G, will be funded through RCOM’s internal cash reserves of Rs 12,000 crore.

Top ADAG officials confirmed the figures to ET, stating its 3G rollout will begin on the GSM (global systems for mobile communications) network, which is slated for a formal launch very soon. The GSM net-work is already being tested in Mumbai and the nation-wide rollout will be over by June next year.

RCOM officials also said that they were still debating on whether to bid for the 3G license on a pan-India level or restrict it only to the five metros. “We are currently working out the financial dynamics. We will have a clearer picture in a week’s time,” he added. However, as of now RCOM is planning a pan-India rollout and is looking at covering the 50 top cities.

RCOM is aggressively scouting for a strategic partner who will help in 3G roll out. Korean Telecom company SKCC is reportedly said to be in talks with Reliance Communications for providing VAS for 3G, as well as IPTV. SK C&C president SK Yoon has said that the company is interested in leveraging its experience on the CDMA platform, and is eying acquisitions in India, as well as partnerships and joint ventures.

The 3G or third generation phones work in higher bandwidths of 15-20 MHz. Currently mobile phones work on 2G or 2.5G technologies. While 2G is focused on voice, 3G supports high-speed data of at least 144 kbps enabling broadband internet access on the mobile, and “triple play” features like mobile TV and converged communication services.

RCOM shares on Monday closed at Rs 216, down 1.16%. For RCOM and other players who are looking at 3G, the technology will allow operators to enhance their capacities for voice traffic as well.

Currently, key operators are facing severe 2G spectrum crunch in top 20-30 cities which is hampering their future growth.

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