Reliance Jio Infocomm seeks to merge telco units

Reliance Industries Limited's telecom arm Reliance Jio Infocomm (RJI) has sent a letter to the Department of Telecommunications (DoT) seeking to merge its wholly-owned subsidiary Infotel Telecom Limited (ITL) with RJIL, which would allow it to offer national and international telecom services under a unified licence.

A DoT official said that with the merger of the two entities, RJI will comply with the unified licence (UL) norms, under which all telephony and data services can be offered under a single permit.

RJI had made a dramatic entry into the telecom sector buying 95- per cent stake in ITL for Rs 4,800 crore immediately after broadband wireless access ( BWA) was auctioned in June 2010. This had also marked the entry of Mukesh Ambani into a sector which had hitherto been reserved for younger sibling Anil in the family settlement agreement.

ITL owns licences to offer international long distance (ILD) and national long distance (NLD) services while RJIL has licences to offer voice and high speed data services across all 22 telecom circles in the country through 2,300 MHz band. It won 1,800 Mhz band of spectrum in 14 telecom circles in February this year. These airwaves were procured to offer voice calls as well.

"In view of RJI holding unified licence having authorisation of all services, including NLD and ILD services, we wish to carry out NLD and ILD business under a single licence. It is, therefore, proposed to consolidate ITL and RJI into one single company through amalgamation," RJI and ITL said in the letter, dated May 23.

RJI is the largest owner of 2,300 MHz band of BWA spectrum and plans to offer fourth- generation (4G) services across all circles. DoT had given a unified licence to RJI in October 2013 after it paid Rs1,658 crore. This is the mandatory amount which internet service providers (ISP) owning wireless broadband airwaves had to pay for offering voice services.

However, this move has been challenged in the Supreme Court by other telecom operators. Earlier, telcos had to obtain separate licences for offering voice, data and other services.

The company has also approached DoT to set up international Internet gateway and Mumbai and Chennai after which it will be able to provide Internet services in the country.

RJIL has requested DoT for completing security process after which the gateway can be made operational.

The security process includes setting up of Internet interception and monitoring system and its successful access to government security agencies under ministry of home affairs.

Courtesy: Mail Today