Reliance Communications (RCom) has put the process for expanding its GSM (global systems for mobile communications) services back on the frontburner. The company had halted the process some time back, waiting for the outcome of the Hutchison Essar stake bidding war.
Telecom equipment vendors, including Ericsson, Nokia, Motorola, Huawei and ZTE, are believed to have already responded to the Reliance GSM tender for a total of 75 million 2G lines and 25 million 3G lines. The value of the tender is estimated in the range of $6 billion to $7 billion.
Chinese vendor ZTE is already in an agreement with Vodafone to supply ‘budget’ handsets across Vodafone markets, including in India. “RCom is about to start evaluation of the offers for its GSM tender,” an industry source said. Technical aspects of the bids will be evaluated first.
But an industry analyst said RCom may not be able to proceed with the GSM expansion process unless there’s adequate spectrum allocation.
Indications that a group of ministers (GoM) set up to look into vacation of defence spectrum for use in telecom may have a meeting soon to deliberate on the matter.
The GoM is headed by external affairs minister Pranab Mukherjee, who was earlier the defence minister.
Currently, Reliance Communications has over 27 million CDMA users across all the 23 circles in India, while group firm Reliance Telecom has 3.8 million GSM subscribers. Market leader Bharti has 33.7 million mobile subscribers and Hutchison Essar 24.35 million.
Vodafone, which has bought control in Hutchison Essar, said it is targeting a 20-25% market share, or 125 million users, in the next four to five years.
The total GSM base in the country is currently 110.5 million, and CDMA 45.8 million (including fixed wireless).
While the total telecom base (fixed and mobile) in the country was over 196 million as of January 31, 2007, it’s expected to cross 200 million by the end of this month.