With an aim to bring all its telecom related operations under a single entity before the launch of its 4G services next year, Reliance JioInfocomm Limited is merging its two subsidiaries with itself.
Infotel Telecom Limited, one of the two merging subsidiaries is the one that owns the long-distance telephony licenses while the other, Rancore Technologies acts as the R&D Unit. Reliance Jio currently holds the unified license for 4G services in India. The merger with Infotel a Telecom will allow Reliance Jio to conduct national as well as international long-distance business with a single license.
Already registered with the Registrar of Companies, Infotel Telecom had previously received the company court’s approval for the merger. Now, it is seeking an approval for amalgamation from the Department of Telecommunications. Close sources disclose that the department is yet to issue a formal written consent.
Even though the approval is pending, the merger between the two companies is considered effective September 1, 2014. Reliance Jio is yet to submit details with regards to the minimum paid-up capital of the company along with the minimum net-worth details of both companies to the Department of Telecommunications.
Sources say that the department has requested some details including certificates that highlight the Indian and foreign equity held by Infotel Telecom along with the details of minimum paid-up capital. The department has recommended that the Telecom Ministry’s wireless planning & coordination wing also take a look at the proposal. This is because Reliance Jio holds 20 MHz of broadband and wireless access spectrum across 22 circles within India.
Reliance Jio has sought similar approvals for the merger of Rancore Technologies with itself.
What to Expect with the Launch of Reliance Jio’s Services
The company currently holds 1800 MHz spectrum across 14 circles and 2300 MHz in 22circles. With the much awaited launch of 4G wireless services in 2015, it is expected that a number of customer woes will come to an end.
For instance, after having crossed a major technical hurdle during its testing phase that began a few weeks ago, it is expected that customers will soon be able to enjoy same data speeds even when they move from one state to another while roaming on the 4G network.
A senior Reliance Jio executive belonging to the network team explained, “When a customer is roaming, the critical issue is continuous connectivity. Operators have struggled, when the subscriber moves from one circle to another with problems such as call drops, low connectivity or even no connectivity. With our vast network agreements, it has become possible and tests have shown 99.95% success.”
Reliance Jio has also signed infrastructure sharing agreements with companies like RCom and Bharti to share infrastructure, and tower sharing deals firms such as GTL Infra, Indus Towers and Ascend Telecom. The aim is to keep cost down during various stages of service deployment. The company aims to lease out about 70,000 towers and install about 30,000 of their own. This includes smaller cell sites on individual poles.