* Reliance Jio to get dedicated fibre on Bharti's i2i
* Deal follows network sharing pact with Reliance Comm this
(Adds details, analyst comments, share reaction)
By Prashant Mehra and Aradhana Aravindan
MUMBAI, April 23 Conglomerate Reliance
Industries Ltd took a step closer to launching 4G
services into a fiercely competitive Indian telecoms market with
a deal on Tuesday to lease undersea cable capacity from Bharti
Reliance, controlled by billionaire Mukesh Ambani, spent $3
billion in 2010 on 4G, including payment for nationwide
airwaves, but has said little about its plans.
Last week, Reliance said its Reliance Jio Infocomm Ltd had
finalised agreements with infrastructure providers and device
makers, among others, for its 4G venture, without naming them.
The company's commercial launch, widely expected later this
year, would bring a deep-pocketed newcomer to the market where
fierce competition and regulatory turmoil have battered
profitability and forced some players from the market.
"It's clear now that the launch is imminent," said Sandip
Sabharwal, head of portfolio management services at Mumbai
brokerage Prabhudas Lilladher, adding it would still take
Reliance about a year to start 4G services.
Earlier this month, Reliance signed a fibre optic
network-sharing agreement with younger brother Anil Ambani's
Reliance Communications, their first business deal
since ending a long running feud three years ago. The companies
said they could cooperate further.
Tuesday's tie-up further signalled Reliance Jio's
willingness to cooperate with competitors.
"The deal marks Reliance Jio's continued efforts to rapidly
grow and expand both its network and infrastructure by building
an ecosystem with multiple carriers and service providers,"
Reliance said in a statement.
Reliance and Bharti, India's biggest cellular carrier,
declined to provide terms of the deal. Reliance also declined to
say when it would launch the service.
"It is telling that they are trying to have international
data connectivity. Reliance is trying to come up in a very big
way and is pretty serious about the telecom business," said
Ankita Somani, telecoms analyst with Angel Broking.
Shares in Reliance Communications, the No.3 cellular
operator, slid about 5 percent in Mumbai trade on Tuesday, after
the announcement of Reliance Industries' deal with Bharti,
before paring some of those losses to close 3.3 percent lower.
Some in the market had said the tie-up between Reliance Jio
and Bharti appeared to lessen the likelihood for future deals
between the carriers controlled by the Ambani brothers. However,
Tuesday's deal is for use of an undersea cable that connects
Chennai to Singapore, a route on which Reliance Communications
does not own capacity.
Reliance Communications had gained 76.8 percent in April
through Monday, partly on hopes it would extend cooperation with
Reliance Jio to include leasing tower space to the new carrier.
Reliance Jio has yet to announce any tower leasing partner.
Reliance Communications was hived off from the combined
Reliance empire after the brothers split up the family
businesses in 2005 in a deal brokered by their mother.
Reliance Industries shares ended 1.77 percent higher on
Tuesday. Bharti shares gained about 2 percent after the
statement before closing down 0.43 percent.
($1 = 54.1850 rupees)
(Editing by Tony Munroe and Jeremy Laurence)