Reliance Jio, RCom to ink roaming pact

In what will extend the telecom alliance between the two brothers beyond infrastructure-sharing, Anil Ambani-promoted Reliance Communications (RCom) is tying up with Mukesh Ambani’s Reliance Jio for a pan-India intra-circle agreement, straddling the 800-MHz and 2,100-MHz bands.

Currently, their alliance is restricted to sharing towers and fibre-optic network.

Through the deal, to be signed in a few days, Reliance Jio, which faces challenges in the 2,300-MHz and 1,800-MHz spectrum bands (these don’t offer subscribers high-speed data indoors), can now address this issue by using RCom’s 800-MHz band. RCom has five MHz of 800-MHz spectrum in most circles across the country and currently, this spectrum is unused. After the spectrum is liberalised, it can be used for fourth generation (4G) long-term evolution (LTE) services, too.

The intra-circle roaming pact will also give Reliance Jio roaming rights on RCom’s 2,100-MHz 3G band and offer services on this band. The roaming deal will bring Reliance Jio on a par with rivals who have an advantage in that they have spectrum across bands to offer seamless data and voice services. While Bharti has spectrum across the 900-MHz, 1,800-MHz, 2,100-MHz and 2,300-MHz bands, Vodafone has spectrum in the 900-MHz, 1,800-MHz and 2,100-MHz bands.

Earlier, Reliance Jio had spectrum in the 2,300-MHz band. After the recent telecom spectrum auction, it bought spectrum in the 1,800-MHz band. However higher bands aren’t well suited for 4G LTE data services, as telecom companies have to invest large sums in more towers for quality similar to that in a lower band. With this deal, the company will be able to offer customers roaming rights on RCom’s spectrum in the 800-MHz and 2,100-MHz bands.

Both the companies declined to comment on the matter. The intra-circle roaming deal follows the Telecom Disputes Settlement and Appellate Tribunal removed a stay on companies roping in new subscribers. A few years earlier, Vodafone, Airtel and Idea Cellular had signed an intra-circle roaming pact to use each other’s 3G spectrum to offer services in places where they didn’t have spectrum.

Reliance Jio and RCom have already signed a number of deals. These include deals to share inter-circle and intra-circle fibre optic networks, as well as towers. Under the tower deal, Reliance Jio can use about 45,000 towers of RCom across the country. For using the towers, Reliance Jio had promised to pay Rs 12,000 crore for 10 years.

RCom is set to gain from the latest deal, too, as its revenue share will be based on Reliance Jio subscribers’ the usage of its network. It is expected the funds will help reduce the company’s debt.