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Can Reliance win 100 million mobile users?

January 21, 2009

Now, Dhirubhai's younger son, Anil Ambani, is going a step ahead.

Having received the group's telecom business in the June 2005 settlement with his brother and consolidated it as Reliance Communications, Ambani has taken the company's focus back to GSM and launched a new pre-paid service that can be bought for just Rs 25 and will be valid for three months, one-eighth of the cheapest offer by anyone else.

The connection will come with five to 10 minutes of free talk time (depending on the circle) every day, which works out to 450 to 900 free minutes in the three-month period.

Ambani's rivals say this is purely a ploy to get additional spectrum at a low cost before the other new licence holders get in. Spectrum, the radio frequency on which mobile signals travel, is a scarce resource on which the new telecom wars are being fought.

A new licence holder, as RCom is, begins with 4.4 MHz and gets another 1.8 MHz in Delhi and Mumbai once its subscriber base in these cities touches 500,000.

Image: ADAG chairman Anil Ambani speaks during the closing ceremony of the Vibrant Gujarat Global Investors Summit 2009 in Ahmedabad. | Photograph: Amit Dave/Reuters

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