RCom sees no 'tariff war' in 3G services; rolls out 3G in four cities

Although the ADA group company does not see a 'tariff war' in 3G services, the launch of broadband services by Reliance Infotel will be the most important factor in determining the tariffs for high-speed data services

Telecom services provider Reliance Communications (RCom), which launched its third generation (3G) services in four cities today, has said that it does not see any 'tariff war' similar to 2G voice services in the newly-launched 3G service.

Syed Safawi, president and chief executive for wireless business at RCom, said, "The tariff war that was witnessed in 2G voice services is now subsiding. In the past several weeks, no one has reduced call tariffs drastically. This, I believe, would become applicable to 3G tariff as well and I do not see any kind of tariff war in this segment."

However, not many (in fact, only four companies, including state-run MTNL and BSNL) have launched 3G services. The Indian government has restricted the number of 3G services providers in a circle to four, one of which has to be a state-run company. As of now, Tata DoCoMo and RCom, are the only private telecom players who have launched 3G services.

Other companies waiting in the wings to roll out broadband wireless access (BWA) services across the country are Reliance Infotel Ltd, a unit of Reliance Industries Ltd which was the only company to win the recently-concluded BWA on a pan-India level. Therefore, the launch of broadband services by Reliance Infotel would be interesting to watch out for any likely tariff war in the high-speed internet space in India.

RCom has said it would offer simple and transparent tariff plans without any hidden charges, in the range of Rs199 to Rs499 per month. Its current tariffs for 2G voice and SMS will remain unchanged, RCom said in a statement.

Currently, all telecom companies earn over 85% of their revenues from voice-based services while the rest comes from non-voice-based or value-added services, including data. "In the next few years, RCom would earn about 30% of its revenues from non-voice services," Mr Safawi said.

RCom, which won the license to provide 3G services in 13 circles, today launched its services in Mumbai, Delhi, Kolkata and Chandigarh. The company will roll out the 3G services in 13 circles, where it holds the license, by the end of FY2011, said Prashant Gokarn, head for 3G services, RCom. "The company is targeting a national footprint of Reliance 3G services through associations with other like-minded, quality 3G licensees in the balance nine telecom circles, during the course of next year," he added.

Mr Gokarn said, RCom's 3G network is capable of offering peak speeds of up to 21 megabits per second (Mbps) and the network can be upgraded to provide services of up to 42Mbps in future. RCom's 3G network has been designed to offer blanket coverage in every town being connected on 3G, with all its 3G sites connected through IP backhaul to provide maximum download speeds and minimum latency, he added.

While the existing subscribers of RCom can access and use the 3G network on their supported device, they can opt for Universal Subscriber Identity Modules (USIMs), which are known to be super secure SIMs for mobile commerce related applications. The company said there is no need for its current subscribers to change their SIM cards and that they can access 3G services depending upon their handsets.

At present, there is not a single company that offers a mobile handset to support speeds of up to 21Mbps. However, RCom is offering a dongle (USB modem) that has the capacity for such high speeds while using it with a laptop or desktop computer. 

RCom has collaborated with Nokia for devices, with Facebook, Nokia and Ericsson for applications, and with Universal Music for content and Motricity for the Web portal.

Earlier in May 2010, RCom emerged as the winner in 13 telecom circles during the 3G auction, including the key metros of Delhi, Mumbai and Kolkata. RCom holds 3G licenses in the telecom circles of Delhi, Mumbai, Kolkata, Punjab, Rajasthan, Madhya Pradesh, West Bengal, Himachal Pradesh, Bihar, North East, Jammu and Kashmir, Orissa and Assam.

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