Reliance Infocom's much talked about broadband project is initially slated to be a low key affair with the company deciding to roll out its broadband services in just seven cities in the first phase. Apart from the four metros, the other cities are Pune, Hyderabad and Bangalore.
While the first phase is expected to be completed by February next year, company sources are tightlipped on the rollout plan for the subsequent phases.
Sources in Reliance, however, said the company never had any big plans in the broadband sector and had never officially claimed the company would roll out broadband services in a large number of cities. Media reports had earlier indicated that Reliance would launch its broadband services in 126 cities.
Reliance has also roped in a couple of investment bankers recently to undertake a business viability study and chart out the marketing strategy for the broadband project.
According to the sources, though the company is putting in place its 30,000-km optic fibre network spanning 115 cities, this will primarily be deployed for offering basic telephony and Internet services.
Reliance's broadband plans are dependent on three factors: demand for the services, tie-up with content providers and ratification of the Communication/Convergence Bill 2001 by Parliament, they said.
Reliance is laying 12 optic fibre pipes. It would initially utilise eight of them to offer telephony-based services. The remaining four pipes will be used to offer broadband services. The company would promote broadband services only in a few cities where the market is mature and customers are looking for services beyond a basic telephone.
The other issue that will determine Reliance's strategy is the reach of its content partners. It is understood that Reliance has signed a memorandum of understanding with 13 companies which are in the business of broadcasting and providing content. If any of them wants to offer their services on Reliance's broadband network in a city other than the metros, it would launch the broadband services in that city too. Given that most Indian towns and villages are proving to be unviable for even basic telephones, the sources said the company is not sure whether there will be any demand for a high-end service like broadband.
Another crucial issue on which Reliance's entire broadband business hinges is the ratification of the Convergence / Communications Bill 2001. The current telecom policy does not recognize broadband as a separate service. This deficiency is taken care by the Convergence Bill and its ratification or rejection will have an impact on the company's plans.
