Reliance Info 2nd phase expansion by December

Private sector telecom operator Reliance Infocomm has set a December deadline to complete its second phase roll-out of both CDMA cellular services and data services.

In the second phase of its expansion plan, the company is expected to add four lakh villages and 5,700 towns across the country to its network at an estimated investment of around Rs 10,000 crore.

According to company officials, the expansion in rural areas may not have any impact on the company's average revenue per user (ARPU), which stood at Rs 320.39 in the third quarter of the current financial year.

"The second-phase network expansion work will cover major national and state highways and railway tracks connecting major cities and towns even as this phase is a part of our Rs 25,000 crore national roll-out programme," Vijay Grover, circle chief executive officer, Reliance Infocomm, told Business Standard here on Tuesday, on the sidelights of the launch of its phase two expansion plan.

Reliance Infocomm plans to cover 85 per cent of Gujarat by September this year. In the second phase, the company will use 80,000 km of fibre cables and 92 per cent of national highways along with 85 per cent of India's existing railway route.

Also, the company is esscriber base to 40 million from 20 million. Sources said it is looking to cover 56 per cent of the country's six lakh villages and these villages account for over 38 crore population.

The company is also targeting to set up 5,000 basic transceiver switches (BTS) which is currently at 4,000 BTS. Reliance Infocomm had witnessed a 12.71 per cent rise in its APRU at Rs 320.39 during the third quarter ended December 2004 against Rs 284.25 in the corresponding period of last year.

Only two other Indian cellular operators Idea Cellular and BPL Mobile had reported an increase in ARPU at 3.03 percent and 1.08 percent, respectively, during the quarter. Hutch had reported a 0.80 per cent decline in its ARPU.

"The rural expansion would not have any significant impact on our current ARPU as we have always played the volume game and we are confident that a large volume in our rural market will more than compensate for the lower ARPU. That does not mean that we will not look at creating appropriate and sustainable revenue streams out of these markets," said Grover.

He also added that the company would not come out with more amnesty schemes for defaulters.

Interestingly, though Reliance Infocomm reported the highest surge in ARPU during the third quarter among cellular operators (BSNL data are not available), its ARPU stands significantly lower than other major players.

While its peak ARPU stands at Rs 320.39, Hutch, which witnessed a dip in its ARPU during the period under consideration, posted an ARPU of Rs 484.08 and Bharti's ARPU dropped 4.52 per cent to Rs 413.76.