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Reliance wins long-distance telecom license

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CIOL Bureau
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NEW DELHI: Reliance Communications Ltd. (RCL), a telecom start-up of the

Reliance group, won a license to provide domestic long-distance telephone

services, a senior group official said on Tuesday.

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"The agreement with the Department of Telecommunications was signed

yesterday before the expiry of the letter of intent that was to end in

January," the official told Reuters on the phone.

Last July RCL, in which wireless technology giant Qualcomm plans to invest up

to $200 million in exchange for a 4.0 per cent stake, won licenses to start

fixed-line services in 16 Indian states, covering more than 90 per cent of the

nations' over one billion population.

Industry sources expect Reliance to launch the services in calendar 2002.

Reliance, India's largest conglomerate, has extensive investments in the

domestic telecom sector. It is spending Rs 250 billion in wiring up the country

with a fiber-optic cable network to offer a whole range of services.

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The group already runs mobile phone networks in eastern India and in Madhya

Pradesh. It aspires to provide fixed-line, mobile, long distance and

international phone services, as well as data, Internet and entertainment

services, once its network is up and running by the end of 2002.

Till recently, state-owned Bharat Sanchar Nigam Ltd., the country's largest

telecom company, was the only provider for national long distance telephony. Its

monopoly was shaken up after private telecom conglomerate Bharti Enterprises

entered the segment and triggered a price war.

The state-run Videsh Sanchar Nigam Ltd., an overseas telecom monopoly, also

has a license for providing domestic long distance telecom calls, but it is yet

to start its service.

Apart from providing traditional wireline phone service, the unlisted RCL has

plans to offer a cheap, limited-area mobile service for which it will use

Qualcomm's Code Division Multiple Access technology.

(C) Reuters Limited.

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