Mukesh Ambani is back in telecom space

GURGAON: Mukesh Ambani-promoted Reliance Industries is making a strong come back.

Reliance Industries will invest Rs 4,800 crore in Infotel Broadband, a relatively unknown entity which won the pan-India BWA licence for Rs 12,848 crore, for picking up 95 per cent equity stake.

Infotel Broadband is currently promoted by Anant Nahata, son of Mahendra Nahata, the promoter of HFCL.

The entry of Mukesh Ambani into telecom will create death knell for several players. The mobile industry is yet to recover from shocks following the implementation of the per second billing concept. Mukesh Ambani, when launched Reliance Infocomm, was the first to take on Vodafone and Bharti Airtel with cost effective schemes. Mukesh Ambani, who settled his issues with brother Anil Ambani, can enter telecom space and is looking for buying out operators.Mahendra Nahata created history when HFCL won several mobile circles when the telecom industry was opened up for private players in mid 1990s. But Nahatas could not complete their mission. Nahatas wanted to come back to telecom through Videocon promoted Datacom, but solved their issues with the joint venture partner -- Venugopal Dhoot family and exited Videocon Telecom (earlier known as Datacom Solutions).

It is interesting to note that Reliance Communications, which is an aggressive broadband player in India, did not win any single BWA circle. In fact, the BWA auction concluded today has proved to be a damp squib for both Reliance Communications and Tata Communications.

Reliance Communications, in a statement said, that the company exited BWA auction a week back. Auction prices significantly exceeded its business case estimates. We will focus on broadband wireless through 3G-ready pan India CDMA and maximum 13 circle 3G coverage. We prefer LTE standard offering a single evolution path for both, CDMA & GSM networks. WiMAX ecosystem has weakened after WiMAX operators like Clearwire and Yota moved to LTE. We may continue to evaluate WiMAX opportunistically on case by case basis in India and other geographies," Reliance Communications spokesperson added.

According to CS Rao, chairman, WiMax Forum India, the auction indicates the interest of telecom operators in the growth of the broadband segment. "WiMax will be the best choice of technology for them to win customers. However, the huge spectrum fee will be a concern for operators. They need to offer best tariffs to broadband users," he added.

Qualcomm, the CDMA chip maker, has entered the BWA space winning Mumbai, Delhi, Kerala and Haryana circles. It won two important circles and can showcase TD LTE technology. It will be initiating discussions with service providers to sell the licence / jointly the run the business later.

"TD-LTE can be rolled out commercially in 2013-14 only. With Qualcomm winning few circles, they will hoard the spectrum till TD-LTE is available for commercial roll outs," Rao added.

Indian telecom is making further progress. 3G and BWA spectrum auctions are examples of the emergence of aggressive players.