Wednesday 21 August 2013

DOT's new guidelines for 4G (LTE) :Reliance's Jio, Tikona, Augere to offer mobile telephony in additions to 4G (LTE) services?

DOT's new guidelines for 4G (LTE) :Reliance's Jio, Tikona, Augere to offer mobile telephony in additions to 4G (LTE) services?

In a very good and competitive move, the Department of Telecommunication (DOT) has introduced a list of new guidelines for 4G.  The new guidelines will allow the service providers who have already purchased 4G licenses from the Government to offer mobile telephony (voice) by paying a additional amount of Rs.1658.57 crores.  

This will not only benefit the incumbent players like Reliance Industries Ltd's Jio Infocomm, Augere and Tikona but it will also increase the competition among the voice players in 2G as well as 3G space.  Which means the 1p/sec call regime will stay put for a long long time or may even decrease, knowing Mukesh Ambani's penchant for pulling customers.  

Remember back in 2012 Reliance Jio Infocomm, Augere and Tikona, won BWA spectrum during the auctions conducted by DOT and are in the process of offering 4G (LTE) services in India. Jio Infocomm should start 4G (LTE) services by December, 2013 while others are in the process of laying the necessary infrastructure for the same.  
The new guidelines issued today, which can be read here, state that “Entry fee applicable to migration to Unified License shall be equal to entry fee for new Unified License except for Internet Service Provider with BWA spectrum. For migration of ISP with BWA spectrum to UL regime with authorisation of providing access services, which enables it to provide mobile voice services also using BWA spectrum, an additional fee equal to the difference between the entry fee for UASL as per details in Annexure V and entry fee paid for ISP license shall be payable in addition to the entry fee as applicable for new UL.”
What this essentially means that those who won the hard fought licenses for 4G wireless broadband spectrum and an ISP can pay the additional amount of Rs 1,658.57 crore, excluding fees payable for unified licences for pan India.   Remember Airtel and Aircel are already offering the 4G services in limited areas like Pune, Bangalore etc.  as of now.  

A piece of advise for the punters, buy Reliance stock tomorrow as it should show a fair bit of rise because of this news in the very very bearish markets.

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