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Reliance to offer cheapest telecoms service

Shailendra Bhatnagar in New Delhi

Reliance Infocomm Ltd, a unit of the powerful Reliance group, said on Monday it will be the lowest cost provider when it launches operations in the country's hotly competitive telecoms market.

"The telecoms services that we will provide will be the cheapest in the world," Akhil Gupta, chief executive officer for corporate development at the Reliance group, told a conference.

He would not divulge details about the company's pricing but said consumers would benefit from its cost-effective strategy.

"Our obsession with capital productivity has resulted in us being able to create a telecoms infrastructure 30 to 40 per cent cheaper than our global peers," he told Reuters. "We believe it is this advantage that our consumers will benefit from."

Mumbai-based Reliance Infocomm will begin providing services on December 28 in Gujarat that embrace mobile, local, domestic long distance and overseas calls.

As part of its drive to be a fully-integrated telecoms player spanning telephone, Internet and entertainment, it is undertaking a Rs 25,000 crore (Rs 250-billion), five-year project to link 600 locales with a 60,000-km optic fibre network.

It is using US-based Qualcomm Inc's code division multiple access 2000 1X technology and has a license to offer fixed-line and limited mobility services in 18 states covering over 90 percent of the more than one billion population.

"Reliance will be a force to be reckoned with because someone who comes in with such a large footprint is bound to create an impact on the market," said Ramchandra Hegde, telecoms analyst at Enam Securities. "Competitive pressures will intensify."

Cellular call charges in India that average two rupees per minute are already the lowest in the world, and outgoing calls from fixed-line phones are priced at Rs 0.40 per minute.

Reliance Industries Ltd, India's largest petrochemicals maker and private refiner, owns a 45 per cent stake in Reliance Infocomm, which will compete with state-run giants and a clutch of private players such as Bharti Tele-Ventures Ltd, partly owned by Singapore Telecommunications.

Gupta said opportunities in India's nascent telecoms sector, billed as one of the fastest-growing markets globally in this decade, were immense due to low teledensity and lack of world class services -- areas which Reliance plans to exploit.

"One billion consumers in India are underserviced and nowhere is it more true than in the telecoms sector," Gupta said.

India has just four phones per 100 citizens compared with a global average of 15.

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