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India roundup: RJIL to launch 4G in 2015, CAG locks horns with DoT, MTNL/BSNL recovery underway

21 Jul 2014

4G startup Reliance Jio Infocomm Ltd (RJIL) has finalised the key vendors and supplier partnerships for its launch of Long Term Evolution (LTE) services next year, the Economic Times writes. The newcomer has begun limited field trials of the technology and plans to expand testing across several cities in August this year, continuing into early 2015. Having previously set its sights on a 2014 launch, RJIL has delayed its commercial launch until 2015. According to a statement from Mukesh Ambani, the chairman and managing director of parent company Reliance Industries Ltd (RIL), 2015 will see a phased launch of RJIL across India to cover all states, 5,000 towns and cities (accounting for over 90% of urban India) and more than 215,000 villages.

Meanwhile, India’s Comptroller and Auditor General (CAG) has alleged that the Department of Telecommunications’ (DoT’s) decision to allow CDMA providers to offer EV-DO without auctioning additional spectrum for the service cost the government an estimated INR41.87 billion (USD694.68 million) in potential revenues. The charges were dismissed by the DoT as ‘presumptive and hypothetical’, adding that the decision had been made in concurrence with the Ministry of Finance. The DoT took the view that EV-DO is an evolved form of CDMA technology, more akin to EDGE than 3G networks. TeleGeography’s GlobalComms Database notes that the increased scrutiny on the telecoms ministry in the wake of the 2G scandal – which saw 122 mobile operating licences cancelled amidst allegations of corruption – has slowed down development in the sector, as officials fear to make any decision lest they face prosecution in the future. Similarly, officials have tended towards insisting on the heaviest fines allowable for every infraction, concerned that any sign of leniency may be misconstrued as corruption.

Elsewhere, the aid package for state-owned telco Mahanagar Telephone Nigam Ltd (MTNL) has begun to reap dividends, the operator reporting profits of INR78.25 billion in the year-ended 31 March 2014 – its first positive result since 2008-2009. Last year, the government agreed to refund the telco for unused spectrum as well as taking over the telco’s pension liabilities, one of its largest annual outgoings. Sister firm Bharat Sanchar Nigam Ltd (BSNL), meanwhile, is estimated to have narrowed its losses to around INR70.85 billion from INR78.84 billion in 2012-2013. Commenting on the process of restoring the two state-backed operators, telecom minister Ravi Shankar Prasad noted: ‘The long term measures, including the merger of BSNL and MTNL, would attempt to position these PSUs [Public Sector Undertakings] to emerge as market leaders in the converged telecoms market.’ The minister added that several groups are conducting in-depth studies on the implications of the merger, in particular with regards to the integration of human resources and technology. Further, the ‘views of unions on the merger would be taken into consideration before a decision is taken in [the] best public interest and that of the two companies.’

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