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Reliance Jio strikes deal with GTL to deploy LTE by March 2015

Reliance Jio Infocomm is aiming to roll out its full 4G offering by March 2015, and has signed a tower-sharing deal with GTL Infrastructure to speed up the deployment while keeping costs down.

"Our mission is to launch a pan-India next-generation voice and data services. We will build the same through a judicious combination of own build and rented infrastructure," said Sanjay Mashruwala, managing director of Reliance Jio Infocomm. He added that the GTL deal was “"not only a step in that direction but will also help us accelerate our roll out."

Reliance Jio plans to lease around 70,000 towers and put up 30,000 of its own, including smaller cell sites on single poles, as it aims to launch fourth-generation (4G) data and voice services next year. The agreement between the two companies will see Reliance Jio use GTL Infra's around 30,000 telecom towers spread across the country.

Swiss brokerage Credit Suisse said that Reliance Jio is on track to launch its services by March 2015, noting that it had completed “completed "installation of about 32,000 [LTE] base stations nationwide”, adding that "the pace of Jio's rollout, importantly, has picked up sharply to 6,500-7,000 per month (vs about 3,000 per month in May-2014).”

The brokerage added that Reliance Jio had "awarded a second LTE base station contract to Samsung for 50,000-to-70,000 units”, which would result in the Mukesh Ambani-owned telco's network size crossing 100,000 base stations. The operator’s original contract with Samsung for 60,000 LTE base stations is still valid.

Credit Suisse added that developments in the global LTE handset ecosystem were "pushing down price-points rapidly", and sub-$100 LTE smartphones could become a reality, which "could be fairly disruptive in India for incumbents (for whom the top 30% customers account for 70% of revenues based on industry discussions)". It added that the rapid fall in LTE handset price-points would also "weaken arguments around expensive handsets".

Reliance Jio has owned pan-India airwaves in the 2300MHz band since May 2010, but has not yet deployed services and must do so by May 2015 to comply with its licence agreement. It also won 1800MHz band airwaves at auction in February, which it will use to launch 4G data services and 2G voice services.

Mukesh Ambani's Reliance Jio has been firming up infrastructure sharing agreements with telecom companies, which already have passive infrastructure in place in a bid to hasten the pace of its launch, lower capital costs and avoid duplication of infrastructure, wherever possible. This could also help limit environmental damage as telecom towers are heavy diesel consumers.

Last year, it had announced an infrastructure sharing deal with Reliance Communications, owned by Anil Ambani. The deal between the companies owned by the Ambani brothers proposed to use some or all of the 48,000 towers held by RCOM's Reliance Infratel unit.

It has also signed a tower-sharing agreement with Bharti Infratel and an infrastructure-sharing deal with Bharti Group that will allow it to use Airtel’s subsea cable network.