With Reliance Jio Infocomm Ltd (R-Jio) proposed pact with Anil Ambani’s Reliance Communications Ltd (R-Com) to use the latter’s 800 megahertz (MHz) band, the company has oveR-Come the biggest technical hurdle that could have scuttled the quality of its yet-to-be-launched fourth generation (4G) telecom service.
The Economic Times reported on Friday that the two companies have signed a pact for sharing R-Com’s airwaves in the 800 MHz band in all its circles.
Executives in R-Com confirmed that discussions between the two companies is underway.
An email sent to R-Jio did not elicit any response.
On Wednesday, the committee of ministers approved the sharing of spectrum between two telecom service licensees if both have spectrum holding in the same band.
If the discussions sail through, R-Jio will be able to provide its 4G telecom service through a much more efficient 800 MHz band in all the 22 circles of India. Currently, R-Jio has licenses of 2,300 Mhz in all 22 circles, 800 MHz in 10 circles and of 1,800 MHz in 14 circles.
The proposed pact will address the biggest concern of market experts and analysts who have questioned R-Jio’s ability to provide a seamless 4G experience across India.
R-Jio’s pan-India license in the 2,300 MHz frequency band has not seen many LTE (long-term evolution, a variant of 4G service) launches internationally. This is mainly because higher the frequency, lower is the signal strength, although the data delivery speed is high. This was perhaps the most important concern of several analysts.
“Higher the frequency, the wavelength of network is very small. In case of 2,300 MHz band, the coverage is not good beyond a radius of 500 metres,” said an analyst with a domestic brokerage. He said R-Jio cannot offer a high quality service across India unless it integrates lower frequency spectrums with the 2,300 MHz band.
Therefore, the company has been planning to integrate its spectrum in lower bands of 800 MHz and 1,800 MHz, in circles where it has these bands, with the pan-India 2,300 MHz band to ensure that the 4G coverage stays seamless, said Anshuman Thakur, head, business development, R-Jio, while talking to Mint last month.
Since the company did not have 800 MHz and 1,800 MHz spectrums in all the 22 circles across India, a seamless coverage was restricted to only the circles where these bands were available.
But during spectrum auctions in March this year, R-Com won the 800 MHz band across 11 circles in India, giving it access to a pan-India (across 22 circles) presence in the 800 MHz band for offering 4G LTE services.
“Once the pact happens, this will a very big positive for R-Jio,” said an analyst with an international brokerage. He said not only this gives R-Jio access to robust pan-India 4G coverage by integrating the 800 MHz band with the 2,300 MHz band, it will also save the company a lot of capital expenditure as setting up infrastructure for lower frequencies is almost half.
It will also help cash-strapped R-Com gain access to a readymade 4G infrastructure in R-Jio’s 10 circles with 800 MHz, bringing down R-Com’s cost of infrastructure to only 12 circles.
However, analysts still have a concern.
“While R-Jio has made a smart move through this, it will only help the company in data delivery, while voice over LTE (VoLTE) still remains a concern,” said the analyst with the international brokerage and added that in a country like India, voice is still a very big part of the revenues and R-Jio has to ensure a seamless voice service in order to gain market share.
