Reliance pays Rs 1,542 cr for unified license

Shailendra Bhatnagar

NEW DELHI: The telecom arm of India's Reliance group said it paid $340 million on Wednesday to move to a unified licence allowing it to offer a full menu of mobile phone services and challenge existing cellphone operators.

The payment by fixed line firm Reliance Infocomm Ltd, 45 percent owned by India's largest conglomerate Reliance Industries Ltd, legitimizes the company's roaming services which GSM firms had said, violated license terms.

"We've paid 15.42 billion rupees as a fee to the government for migrating to a unified licence and to continue offering our five million customers the next generation of fully mobile services," Amit Khanna, spokesman for the firm, told Reuters.

"This is inclusive of all charges due from us."

Moving to a unified license will help the company draw more customers from cellular phone firms as its services are priced cheaper in the flourishing mobile sector, which has 25 million users thanks to one of the lowest call charges in the world.

"Their bouquet will now officially have roaming which will help them to get more customers," said a Bombay-based analyst.

Until now, phone firms had to buy separate permits to offer different services, but last month the government introduced a single licence covering mobile and basic services to stoke growth and reduce intense litigation in the sector.

Reliance Infocomm offers CDMA-based mobile services, domestic long distance calls and high-speed data access through a 60,000-km terabit fibre-optic network that runs across a vast swathe of India and is being expanded.

The 15.42 billion rupees payment include a 4.85 billion rupees fine which the regulator imposed on Reliance Infocomm for offering roaming services although its license only allowed users to make and receive calls within city limits.

The remaining 10.57 billion rupees is the entry fee that Reliance has paid to become a fully mobile player in 18 of the 22 circles or zones into which the domestic telecoms sector is divided.

There are seven fixed line companies offering mobile services in competition with a dozen cellular services providers such as Bharti Tele-Ventures Ltd -- 16 percent owned by Singapore Telecommunications Ltd.

Reuters