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Reliance group gets 16 fixed-line licences

The government has awarded licences to the Reliance group to operate fixed-line telephone services in 16 telecom zones across the country, a government official said on Monday.

Licence agreements with group company Reliance Communications were signed last week after the company paid entry fees of Rs 3.98 billion and nearly Rs 16 billion in bank guarantees to the government, the telecoms ministry official, who did not want to be identified, said.

A Reliance group spokesman in Bombay confirmed the payments and the signing of the licence agreements.

The Reliance group is the first and only group to be awarded fixed-line phone licences by the government which opened up the business to unlimited competition in January this year.

The government has allowed fixed-line firms to offer a cheaper limited area mobile service to customers in a bid to draw private investments into the sector.

The fixed-line business in India has been the preserve of state-run companies Mahanagar Telephone Nigam Ltd which provides services in Bombay and New Delhi, and Bharat Sanchar Nigam Ltd which operates in the rest of the country.

The Reliance group, India's fastest-growing private conglomerate with a dominant presence in the petrochemicals and oil refining sectors, has drawn up major investment plans for the telecoms business.

It is in the midst of implementing a Rs 250-billion project to connect the country with an optic-fibre network that will offer the entire range of telecoms services.

The influential Indian group hopes to be present in all aspects of the telecoms business from fixed-line to mobile telephony, national and international long-distance phone services, data and other value-added services.

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