Mukesh zeroes in on data biz

By Rishi Raj

Now that he has acquired Infotel's broadband business, Mukesh Ambani could revisit his ambitious plans in telecom, aborted by the 2005 de-merger of the family business. What's on the anvil could be launch of a slew of high-end data services and even a revival of the abandoned alliance with Microsoft for Internet Protocol TV (IPTV), informed sources say.

Mukesh's original plan was to lay optic-fibre cable to every home, which would serve as a pipe providing a bouquet of services like high-speed broadband, digitised content, IPTV and video on demand. In fact, the company had even entered into an alliance with Microsoft for the IPTV project, which had to be later abandoned.

"Mukesh started with voice telephony through Reliance Infocomm in 2002 and had huge plans to usher in a broadband revolution with a bouquet of services, which could not happen," said an executive who worked on the telecom project but is not with the company any more. These projects could now be revived and taken to their logical end, he added.

In fact, FE visited some residential apartments in east Delhi and found the cable boxes in the apartments, which brought the fibre to the doorsteps. The cable boxes still lie unused.

However, today Mukesh's Reliance Industries Ltd (RELIANCE.NS : 1063.35 +17.1) has spectrum for wireless broadband services but not the fibre. The services that RIL wants to offer are not possible on wireless alone and would require fibre, so collaboration would be needed with other telecom firms, which have laid optic fibre network. The partnership would be multi-fold including Anil Ambani's Reliance Communications Ltd (RCOM.NS : 178.75 +6.55).

The broadband dreams were confirmed when in an analyst presentation on Saturday evening, RIL said the data market today is at the same stage at where the voice market was when Infocomm ventured in 2002. Around that time the total mobile subscriber base in the country was at around 65 million, which currently is at over 600 million. Currently the user base for broadband is only around 9 million providing a fertile ground for growth.

RIL said its foray into the telecom sector would entail an investment of about $5 billion, which would include the payment of spectrum fees of Rs 12,872 crore. Around $1 billion would be invested for rolling out broadband services to attain a target of 100 million subscribers in the next five years.

RIL's Manoj Modi, who was the chief architect of the Infocomm project and is tipped to be the brain behind the project now said that broadband infrastructure could be shared with any of the existing players. This establishes the fact that RIL would be open to partnering all the existing operators, technology providers and device manufacturers.

Replying to a specific query on whether RIL also intends to acquire any 2G telecom player for voice telephony, Modi said, "RIL will not acquire any 2G player", thus ending all speculation about the company's interest in Videocon (VIDEOIND.NS : 202.45 +2.25) Mobile, a Venugopal Dhoot group firm that acquired licences for 22 circles in 2008.