In what could be a rare collaboration in the domestic telecom space, Anil Ambani-led Reliance Communications Ltd (RCom) will partner with Reliance Jio to provide fourth generation (4G) services in the country by year-end. Reliance Jio is the telecom arm of Mukesh Ambani-led Reliance Industries.
At the annual general meeting on Wednesday, RCom chairman Anil Ambani said the company would enter into a "strategic partnership" with Reliance Jio for 4G spectrum sharing-cum-trading.
Following the announcement, the stock price of RCom rose sharply by 5.6% to end at Rs 67.55 on the National Stock Exchange (NSE).
RCom, India's fourth-biggest telecom operator by subscribers, is the latest one to join the 4G race. Bharti Airel and Vodafone are preparing to take on the competition from Reliance Jio, which is expected to roll out 4G services by December, Business Standard reported.
Earlier this month, a media report had said that the Ambani brothers were set to sign a spectrum sharing-cum-trading agreement, which would help Mukesh Ambani-owned Reliance Jio Infocomm to obtain more "bandwidth options" to roll out 4G services covering most of the telecom circles in India.
"Trading will allow RCOM to also cut back its debt while allowing Jio to beef up its airwaves as it launches in December," a source had said.
RCom's debt stood at over Rs 38,000 crore at the end of the June quarter this year. The company is planning to trim its debt by selling its tower and overseas business units and also by monetising its DTH unit and real estate properties.
The Economic Times had reported earlier that the spectrum sharing agreement would enable Reliance Jio to gain access to 10 MHz of contiguous 4G bandwidth in Mumbai, UP-East, Orissa, Madhya Pradesh, Bihar, Assam, Northeast, Haryana, Himachal Pradesh and Jammu & Kashmir,
On the other hand, the partnership will also be beneficial to Anil Ambani's RCom, as it can use Jio's 4G network in the 10 circles without incurring any "incremental capex costs", the report said.