RJio & RCom Enter Spectrum-Sharing Pact

Mukesh Ambani-led Reliance Jio has signed a spectrum trading and sharing agreement with brother Anil Ambani's Reliance Communications. This is subject to RCom's approval to liberalize its CDMA spectrum.

New 4G entrant Reliance Jio already owns 800MHz spectrum in the circles of Assam, Bihar, Haryana, Himachal Pradesh, Jammu and Kashmir, Madhya Pradesh, Mumbai, North East, Odisha and Uttar Pradesh (East).

The company has entered into a spectrum trading deal with Reliance Communications Ltd. in nine circles where it lacks any 800MHz spectrum. It has also struck an 800MHz spectrum sharing agreement with RCom covering 17 circles.

But RCom, India's fourth-biggest mobile operator, would need to liberalize its CDMA spectrum for the agreement to go through.

"The spectrum arrangements between RJIL and RCOM will result in network synergies, enhanced network capacity and will optimize spectrum utilization and capex efficiencies," said the companies in a joint press release. "Both operators anticipate considerable savings in operating costs and future investment in networks."

The two companies also intend to enter reciprocal Intra-Circle Roaming (ICR) arrangements.

RJio is planning to launch a commercial 4G network soon. It has already launched Lyf, its devices brand, and made 4G services available to more than 100,000 employees of Reliance Industries Ltd. (RIL) , its parent company. (See RJio Sputters Into Lyf With 4G 'Launch' and RJio 4G Vision Starts 'Lyf'.)

RJio and RCom formed a tower-sharing agreement back in 2013. The two operators have also previously agreed to share intra- and inter-city fiber network.

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The latest move comes amid growing speculation that RJio and RCom are planning a merger of their operations.

Formerly bitter enemies, Mukesh and Anil Ambani have recently been on much friendlier terms, and access to RCom's subscriber base would boost RJio's prospects.

RCom recently acquired Sistema Shyam TeleServices Ltd. , a smaller competitor, and is in talks about a takeover of rival Aircel Ltd. , a move that would give it more than 200 million customers in total. (See India's RCom in Talks to Buy Aircel and MTS India Merges With RCom.)

A merger between RCom and RJio would put pressure on market leaders Bharti Airtel Ltd. (Mumbai: BHARTIARTL), Vodafone India and Idea Cellular Ltd. to up their game.

— Gagandeep Kaur, contributing editor, special to Light Reading

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