Mukesh Ambani buys Infotel for $1b

Nicole McCormick
14 Jun 2010

India has a new major wireless player, with billionaire Mukesh Ambani’s Reliance Industries (RIL) emerging with control of wireless broadband startup Infotel Broadband.

RIL said Friday it will invest about 48 billion rupees ($1.03b) in Infotel via a new share issue, giving it a 95% stake in the firm.

The deal will pit Mukesh’s RIL against his brother Anil Ambani, which controls second largest mobile firm Reliance Communications (RCom), in the mobile space.

Mukesh was only allowed to take on RCom as of last month, when the feuding brothers’ non-compete agreement in wireless telecoms lapsed.

Infotel was the biggest winner of India’s just completed broadband wireless auction - the only one of 11 contenders to emerge with nationwide spectrum. It plans to roll out a TD-LTE network in the 2.3GHz band.

The auction ended on Friday, earning 385.43 billion rupees ($8.3b) for the government.

Infotel bagged 20MHz spectrum lots in all 22 circles for 128.48 billion rupees, followed by mobile operator Aircel, which secured spectrum in eight regions for 34.38 billion rupees.

RIL said it believes it “can take a leadership position” in India’s mobile broadband market.

“A single 20MHz TDD spectrum [block] when used with LTE (Long Term Evolution) has the potential of providing greater capacity when compared to existing communication infrastructure in the country,” RIL stated.

A source from Maxis-backed Aircel, which paid the fourth highest 3G bid price of $1.39 billion last month, told that it gunned for BWA spectrum since these frequencies were “immediately available” unlike, say, spectrum at 700MHz for FDD-LTE.

Other BWA winners included Tikona Digital Networks, which will pay 10.58 billion rupees for five licences, and US-based Qualcomm, which won four spectrum blocks for TD-LTE – including Mumbai and Delhi –for 49.13 billion rupees.

India’s largest cellco, Bharti Airtel, paid 33.14 billion rupees for a 20MHz slice of 2.3GHz spectrum in four circles, three of which are in regions where it failed to win frequencies in last month’s 3G auction.

Augere won just one concession for 1.25 billion rupees. Mobile operators Reliance Com, Vodafone India, Idea Cellular and Tata Communications failed to secure 2.3GHz frequencies.

“The company decided to step away from the current BWA auction when prices went beyond rational levels, owing considerably to the artificial scarcity of spectrum with just two slots available and 11 bidders in the fray,” Vodafone said.

Government-owned operators BSNL and MTNL have already been awarded 20MHz of BWA spectrum in each of their respective circles.

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