Reliance plans massive network expansion

25 Jan 2005

India’s Reliance Infocomm is planning to expand its wireless in the localloop (WiLL) CDMA network to reach 5,700 towns and 400,000 villages by the end of this year. The expanded network will reach almost two-third’s of the sub-continent’s rural population and will provide coverage of 91% of India’s road network and 85% of all rail routes. The expansion, which will cost in the region of INR240 billion (USD5.5 billion), is aimed at attracting 20 million customers by March 2006, helping to raise India’s teledensity to 10%. At the end of 2004 Reliance Infocomm’s subscriber base across 20 circles was 10,298,208.

According to TeleGeography’s GlobalComms, Reliance Infocomm began offering fixed line services in India in 1997 when it was granted a licence to operate in the Gujarat circle. In July 2001 it won concessions to operate in a further 16 circles, giving it coverage of more than 90% of the population. In January 2002 Infocomm expanded its business by winning an international long-distance concession, and immediately began the installation of a 60,000 km fibre-optic cable network which is now fully operational. By late 2004 Infocomm had licences to operate in 20 circles, most recently adding Jammu and Kashmir to its portfolio.

Despite being classified as a wireline operator, the bulk of Infocomm’s business now comes from the provision of wireless in the local loop (WiLL) services, which it launched in May 2003 to universal disdain from the country’s licensed GSM providers. Despite outspoken objections from the cellcos and the Cellular Operators Association of India (COAI), Infocomm’s WiLL service received the TRAI’s blessing and regulatory approval in August 2003. Two months later the government approved a plan to unify all telecoms services licences under one type of operating concession, but Infocomm’s service is still the target of vitriol from the GSM sector. The main bone of contention is the fact that by utilising its existing fixed infrastructure, Infocomm has side-stepped the huge costs incurred in rolling out a wireless-specific network. With these costs a fraction of those of its GSM rivals, Infocomm can offer significantly lower call rates.

Infocomm is not only expanding in its domestic market. In January 2004 it purchased US-based Flag Telecom for USD211 million, giving it control of Flag’s 50,000 km undersea cable network, which links the US to Asia, the Middle East and Europe.

TeleGeography's GlobalComms Database