India allows 4G airwave holders to offer voice, boosts Reliance Ind

Mon Feb 18, 2013 4:56am EST
 

By Devidutta Tripathy

NEW DELHI (Reuters) - India will allow wireless broadband airwave holders to provide voice services if they pay an additional $306 million, a senior government official said on Monday, a move likely to boost billionaire Mukesh Ambani's Reliance Industries Ltd.

Reliance Industries, controlled by India's richest man, is the only company with nationwide fourth-generation (4G) broadband airwaves. The company re-entered the fiercely competitive sector by buying airwaves in a 2010 auction and has so far invested at least $3.5 billion.

Firms which own the broadband wireless access (BWA) airwaves can provide voice services along with high-speed Internet if they pay a fee of 16.58 billion rupees ($306 million), R. Chandrashekhar, the top bureaucrat at the telecommunications ministry, told reporters.

"There is no restriction on the technology that is being used (to provide voice services)," he said.

A move by Reliance Industries, which is still preparing to launch high-speed 4G Internet services, into the voice market would intensify competition and hurt rivals such as Bharti Airtel Ltd and the Indian unit of Vodafone Group Plc.

Reliance Industries shares extended gains to as much as 1 percent after the news, while shares in Bharti Airtel, the country's top telecommunications carrier, were down nearly 1 percent at 4.20 a.m. ET.

The Telecom Commission, the highest decision-making body within the ministry, approved the move on Monday, but it must to be formally signed off by the Telecommunications Minister, Chandrashekhar said.

Voice accounts for almost 85 percent of Indian carriers' revenues, while data is still at a nascent stage. Data services contribute just about 5-6 percent of the total mobile services revenues as fewer people browse the Internet on phones.   Continued...

 
A woman walks past a poster of Reliance Industries installed outside the venue of the company's annual general meeting in Mumbai June 7, 2012. REUTERS/Vivek Prakash