India's Reliance Communications (RCom) has signed a long-anticipated spectrum sharing and trading deal with Reliance Jio Infocomm aimed at helping each company bring 4G services to the market.
RCom, the incumbent operator owned by Anil Ambani, and Reliance Jio, the pan-India 4G startup operated by his brother Mukesh, have entered a long-expected union.
Under the agreement, RCom will sell its 800-MHz spectrum in nine of India's 22 telecom circles to Reliance Jio. In 17 circles the two companies have agreed to share 800-MHz spectrum.
The collaboration also covers plans to enter reciprocal intra circle roaming arrangements, giving RCom customers access to Reliance Jio's LTE network and vice versa.
In a statement, RCom said the spectrum arrangements between the two companies “will result in network synergies, enhanced network capacity and will optimize spectrum utilisation and capex efficiencies. Both operators anticipate considerable savings in operating costs and future investment in networks.”
But RCom will first need to liberalize its 800-MHz spectrum holdings. Earlier this month, India's telecom ministry instructed RCom to pay 65.9 billion rupees ($973.2 million) in order to liberalize the spectrum and allow it to be traded or sold. This has been calculated based on the market value of the airwaves as well as a one-time spectrum charge.