Reliance GSM plan one of the cheapest

Reliance Communications' proposed investment of Rs 1,500 crore for its GSM operations in the country is one of the cheapest anywhere in the world, as this entails an investment of around $33 per digital exchange line (DEL).

The company was planning to set up 10-12 million GSM lines in the country to roll out its GSM operations, mainly in Mumbai and New Delhi.

The industry average in India stands at around $50 per DEL in the country, and with Reliance proposing to invest only $33 for the infrastructure will be the lowest in the country.

However, industry sources say this could not be the lowest in the world as certain GSM players have set up DELs with much lower costs elsewhere.

Lowering the infrastructure and overhead expenses at an early stage will help the company bring down its overhead costs, which will eventually result in the company offering services at competitive prices, the sources said.

The requests for proposals are expected to be rolled out soon. When contacted, Reliance Communication officials declined to comment on the issue.

The Anil Dhirubhai Ambani Group company is foraying into the GSM space and has sought allocation of 4.4 MHz spectrum, which falls under the 1800 MHz frequency, for commencing its GSM operations.

The company, which at present operates 2 million GSM lines in the north-east, plans to have a pan Indian presence.

This would include circles in Assam, West Bengal, Orissa, Bihar, Himachal Pradesh and Madhya Pradesh among others. The company has also initiated talks with seven major equipment vendors, including Motorola, Nokia, ZTE and Ericsson, among others.

Reliance Telecom, a wholly-owned subsidiary of Reliance Communications, has licenses to operate in eight GSM circles in the country.