RIL plans private GSM network

Mukesh Ambanis Reliance Industries Ltd. is prepared to apply for permission to set up a nation-wide broadband telecom network for internal ( non-commercial use).


Reliance Infocomm was a part of Reliance Group before the split of the RIL. Then RIL was using the service of RIL for its internal use. After the split it is using Airtel and BSNL service. This is a cost cutting measure by the company as it is going to save on its telephone bill in the long run.

This will require an investment of up to $ 750 million. The company is looking at its need in the long run. Now it is expanding in the retail market through its Reliance Retail, Reliance Petroleum chain etc. Company will also use the network for connectivity within its planned Special Economic Zones. It is a good strategy adopted by RIL. It will easily get regulatory approval. Again the costs of equipments are decreasing day by day. Another factor is that it has the experience of this field due to Reliance Infocomm.

But one thing is quite clear from this step is that both the Ambanis brother are firm in their stands and are not going to do business with each other. It may affect both the company as well as the Indian economy. Both brothers are among the richest Indians (Mukesh Ambani is 2nd richest and Anil Ambani 3rd richest). So if they are continuing their fight it is going to affect the economy and its shareholders. Other players may be benefited in this battle. The major one can be Bharti. As Bharti is entering into retail with the collaboration of Wal-Mart (not confirmed yet) it will try to take the advantage of the battle between the two brothers.

Source: Business Standard