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.
"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.
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.