India will allow wireless broadband airwave holders to provide voice
services if they pay an additional $306 million, a senior government
official said on Monday, a move likely to boost billionaire Mukesh
Ambani's Reliance Industries Ltd.
Reliance Industries, controlled by
India's richest man, is the only company with nationwide
fourth-generation (4G) broadband airwaves. The company re-entered the
fiercely competitive sector by buying airwaves in a 2010 auction and has
so far invested at least $3.5 billion.
Firms which own the
broadband wireless access (BWA) airwaves can provide voice services
along with high-speed Internet if they pay a fee of 16.58 billion
rupees, R. Chandrashekhar, the top bureaucrat at the telecommunications
ministry, told reporters.
"There is no restriction on the technology that is being used (to provide voice services)," he said.
move by Reliance Industries, which is still preparing to launch
high-speed 4G Internet services, into the voice market would intensify
competition and hurt rivals such as Bharti Airtel Ltd and the Indian
unit of Vodafone Group Plc.
Reliance Industries shares extended
gains to as much as 1 percent after the news, while shares in Bharti
Airtel, the country's top telecommunications carrier, were down nearly 1
percent at 2.50 pm.
The Telecom Commission, the highest
decision-making body within the ministry, approved the move on Monday,
but it must to be formally signed off by the Telecommunications
Minister, Chandrashekhar said.
Voice accounts for almost 85
percent of Indian carriers' revenues, while data is still at a nascent
stage. Data services contribute just about 5-6 percent of the total
mobile services revenues as fewer people browse the Internet on phones.
Reliance Industries was not immediately available for a comment.
the Telecom Commission deferred a plan to bring tower companies under
the Unified Licensing regime, which is positive for companies such as
Bharti Infratel Ltd .
If brought under the
regime, the tower companies would have to pay an annual licence fee of 8
percent of their revenue and would be required to cut foreign
shareholding to 74 percent.
Currently the companies pay no licence fee and a foreign shareholder can own as much as 100 percent of their equity.
© Thomson Reuters 2013