"The math works out beautifully for them. Even if RCom has to spend Rs 180 per subscriber for three months as termination charges, that comes to only Rs 9 crore (Rs 90 million) for 500,000 consumers. Once it reaches that number, it gets 1.8 MHz of additional spectrum under government policy. Everyone knows that the spectrum value is many times more," says an RCom rival.

He adds that apart from the subscriber base, the usage has also been made a criterion for allocation of additional spectrum. That RCom can achieve thanks to the free minutes which it has spread over the three-month period.

Says analyst Mahesh Uppal: "The strategy is akin to free sampling and acquiring subscriber numbers by being a loss leader so that you can claim more spectrum. The fear is that its consequences should not be passed on to others by creating a shortage of the scarce resource."

The last time, Reliance's cheap service garnered a large number of subscribers but later it had to write off a large sum as non-performing assets to clean up its balance sheet.

Also read: Top 8 tech predictions for 2009

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