RComm to invest $2.5 bn

Having lost the battle for Hutchison Essar, Anil Ambani-controlled Reliance Communications is drawing up plans to invest up to $2.5 billion (Rs 112.5 billion) in its Code Division Multiple Access as well as Global System for Mobile Communication networks.

Ambani had recently outlined this plan at an earnings call for global investors, just days before Vodafone bagged Hutchison Essar on February 11. Reliance Communications was counting on this acquisition to expand its GSM footprint in the country, as it shells out a royalty on its CDMA operations to Qualcomm.

Analysts expect Reliance Communications to roll out a pan-India GSM network, as it has said it intends to do, for between Rs 9,500 crore (Rs 95 billion) and Rs 11,000 crore (Rs 110 billion).

The investment would compare favourably with the estimated $4 billion that has been invested by Bharti Airtel and Hutch in their entire wireless business till date. Reliance Communications, analysts said, could also look at acquiring a domestic GSM operator.

Ambani has already outlined its plan to roll out 20,000 towers, locating CDMA as well GSM antenna on the same tower.

The company is also looking at additional tower capacity through co-location agreements with all major operators.

The goal is to have signal available in any city with a population of 50,000 and more, taking the total number of towns covered from 2,200 now to nearly 4,000 by June this year.