A string of multinational telecom majors have queued up before Reliance's door for what could be one of the biggest orders for its wireless in local loop (WiLL) project.
Telecom equipment and networking giants such as Lucent Technologies, Nortel Networks, Motorola, Ericsson and Samsung are in the race to bid for equipment, networking and other services for Reliance's ambitious basic telephony project with limited mobility services in 18 circles.
The Reliance group has already announced its intention to launch its WiLL services in India. The investment envisaged by the group is more than Rs 25,000 crore over the next 4-5 years. Hence the order for the equipment could stretch to thousands of crores.
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The development assumes significance in view of the slowdown in telecom infrastructure globally. Telecom equipment majors are feeling the heat of major orders drying up, with China and Korea being the only major markets seeing significant activity.
Telecom industry sources said that after China, India promises to be the largest market over the next 3-4 years, with several large Indian groups -- Reliance, Tatas, Bharti, VSNL among others -- lining up major investments in infrastructure in the area.
A Reliance spokesperson declined to share any details on the fate of order placing. "There is no development in the matter yet," the official said.
Due to the downward revision in telecom equipment prices overseas, Reliance, and other Indian players, could be major beneficiaries as it will be able to bargain cheaper prices.
According to sources, the supplier of the equipment will also offer other services such as maintenance. The strategy of these telecom equipment major is clear: India offers a big market for their products with the opening up of the telecom sector. In fact, the domestic telecom market could even become bigger than China, experts say.
According to analysts, revenue from telephone service is expected to account for most of the sales over the first five years. The company is expecting the existing voice market of $8 billion to grow to $20 billion over the next five years.
The Indian infocom market presents a unique opportunity. The current Indian teledensity is amongst the lowest in the world, with only 3 crore phones in a population of over hundred crore.