Reliance Jio hits a home run: Acquires spectrum in the 1800 MHz Band

Reliance JioInfocomm Limited (RJIL) has announced that it has acquired the rights to use 1800 MHz in 14 key circles across India. This band was purchased in the recently concluded spectrum auction in Delhi. RJIL plans to use this spectrum, ranging from 2×5 MHz to 2×7 MHz in each of these 14 circles, in conjunction with its pan India 2300 MHz spectrum to address the expected surge in demand for digital services as well as to enhance in-building coverage. The company plans to provide seamless 4G coverage for which it has a pan-India license.

Reliance Jio has acquired this spectrum in many circles. It won the 1800 MHz spectrum in the three urban areas that were under the purview of this auction – Mumbai, Delhi and Kolkata. The company also won the right to this band across 10 States – Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu, Kerala, Madhya Pradesh, West Bengal, Assam and Orissa. It also has won rights in many States in the North-East of India.

Mukesh Ambani has always had a huge interest in the telecommunications industry and he was the brains behind the launch of a communications company at the start of the millennium. The Chairman and Managing Director of Reliance Industries Limited, India’s largest private sector enterprise was obviously ecstatic at after the auction. In a statement, the RIL Chairman was quoted, “With this acquisition, Reliance Jio will be the holder of the largest quantum of liberalized spectrum and with the longest residual spectrum life. Reliance Jio’s seamless 4G services using FDD-LTE on 1800 MHz and TDD-LTE on 2300 MHz through an integrated ecosystem, aims to provide unparalleled high quality access to innovative and empowering digital content, applications and services.”

The overall cost that Reliance Jio is going to bear to have the exclusive right to use this spectrum is Rupees 11,054 Crore. This is estimated to be over a 20 year period. RJIL plans to opt to make an upfront payment of 33% with the balance payable in 10 equal annual installments after a two year moratorium, as per the provisions of the Notice Inviting Applications issued by DoT.RJIL has acquired the 1800 MHz spectrum at 31% premium to reserve price. An interesting thing to note is that the winning bidder’sof the 900 MHz spectrum paid between 55% to 110% premium over the reserve price.

RJIL is offering some great services. In addition to high speed data, the 4G network will provide voice services from / to non-RJIL networks. The great thing about 4G services is that there are many mobile phones in the market today that have the capability to operate both TD-LTE and FD-LTE technologies in the 1800 MHz and 2300 MHz bands as well as conventional 2G / 3G networks. In any case, Wi-Fi enabled 2G / 3G device can access RJIL’s services through an affordable pocket router.

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