Aircel Earmarks $500M for 3G

Indian mobile operator Aircel Ltd. intends to spend US$500 million in the first year of its 3G rollout program, the company announced today.

Like its larger peers, Bharti Airtel Ltd. (Mumbai: BHARTIARTL) and Reliance Communications Ltd. , Aircel plans to launch its 3G services in the first quarter of 2011. Initially, Aircel will launch its 3G services in the top 10 cities in each of the 13 circles in which it won spectrum. (See India's 3G Auction Ends, Raises $14.6B and India's 3G Players Ready for Swift Launch.)

"By the end of next year, we are targeting a subscriber base of 75 million, of which 10 percent will be 3G subscribers," Aircel COO Gurdeep Singh said on the sidelines of a press conference in New Delhi today. Currently the company has 45 million subscribers. (See India Gets Its 3G On.)

Aircel, India's seventh largest mobile operator, plans to announce deals with its chosen 3G equipment suppliers during the coming week. It's likely that the operator, which has been preparing its Service Provider Information Technology (SPIT) systems for 2G growth and the introduction of 3G services, will have managed to secure itself some very competitive deals. (See India's 3G Equipment Market a 'Bloodbath', India's 3G Billing Challenge, SPIT Week Spotlight: Aircel's Transformation, and Aircel's CIO Talks Innovation .)

Aircel's main mobile infrastructure suppliers are Nokia Networks , Huawei Technologies Co. Ltd. , and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763). (See ZTE Wins India Deal.)

A number of other 3G spectrum auction winners have already announced their infrastructure suppliers, or are in the process of finalizing their 3G technology deals with the vendors. (See More 3G Action in India, Bharti Chooses 3G Suppliers, Huawei Bags India 3G Deal, Reliance Sets Out Its 3G Stall, Reliance Hands 3G Deal to ZTE, and Tata Goes 3G With NSN.)

Since Aircel has secured 3G spectrum in 13 of India's 22 circles, it is exploring intra-circle roaming deals with other operators that can help fill Aircel's 3G gaps. "We are in talks with all the service providers and should be finalizing the deals soon," says Singh. (See 3G to Drive Roaming Deals in India.)

Aircel also secured Broadband Wireless Access (BWA) licenses in India's other spectrum auction earlier this year, winning capacity in eight circles.

Aircel is yet to decide whether to deploy WiMax or TD-LTE technology to build out its BWA network. The company is likely to reach a decision regarding this by the end of October. (See India's BWA Auction Ends in $8.2B Drama.)

The operator is also in the news currently as a potential investment partner for Middle East carrier Etisalat , but Singh neither confirmed nor denied the companies were engaged in talks. (See Rumor: Etisalat Seeks Aircel M&A Deal.)

— Gagandeep Kaur, India Editor, Light Reading

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