Reliance Jio to offer voice services with Cheap Internet

The voice-dominated domestic telecom space is set to liven up further with corporate giant Reliance
Industries, the only national licence holder for 4G spectrum, today saying it will be offering not just high speed data but voice services as well.
"We will definitely be offering voice ... the fact that we have submitted the application for participating in the forthcoming 2G and 3G spectrum auctions makes it clear that we are going to enter the voice space," Reliance Group Chief Financial Officer Alok Agarwal told reporters here.
    He was responding to a question on the much-talked about plan of Reliance Jio Infocomm Ltd (RJIL), the Mukesh Ambani-led Group's telecom arm.
Agarwal, who was briefing the media on RIL's Q3 earnings, however, declined to reveal anything more such as capex plans, tariff, launch time-line, saying, "I am not going to speak
anything more on this."
This is for the first time the company, which before the Group' division was one of the pioneers in cheaper call rates when it had launched CMDA telephony under Relaince India Mobile brand, has expressed its intention to enter the voice space, which has the cheapest call rates in the world.

Earlier this week, Reliance Jio applied for participation in the spectrum auctions for the 900/1800 Mhz bands, slated for early February. The government has put 16 blocks of 900 Mhz spectrum for
auction each in Delhi and Mumbai and 14 blocks in Kolkata.
 Earlier this month, Reliance Jio had told PTI it would
be offering 10-12 times faster 4G wireless service compared to
3G networks.
"We are practically achieving a speed of 49 megabit per second downlink (download) and uplink is between 8-9 mbps.
Theoretically, the present set up that we have, can achieve speed of 112 mbps downlink," an RJIL official had said.
Reliance Jio is the only Indian company to have nationwide 4G spectrum acquired for over Rs 12,000 crore in the 2010 spectrum auctions.
The company is running trial of products, including phone and TV services that it plans to provide through 4G network. It will provide outdoor customer premise equipment (CPE) that will connect to its mobile towers.

RIL bank guarantee issue to be resolved soon

Petroleum Minister M Veerappa Moily today said he is confident of resolving the issue of securing USD 135 million in bank guarantees from Reliance Industries within a fortnight to enable the company to charge higher gas price from April 1. "I am confident of settling the bank guarantee issue with Reliance within a fortnight," Moily told reporters when asked if he would set a timeline for resolving the vexed matter. According to the ministry, while the proposed bank guarantee would secure the government's interests on one hand, the higher pricing would protect the interests of RIL on the other. The bank guarantee is being sought as the government feels that the steep fall in KGD6 gas output is not because of geological reasons, as is being claimed by RIL, but on account of the company's hoarding gas with to make a windfall gain from next April when gas prices will be doubled. If the hoarding allegations are true, the bank guarantees would be encashed with interest for the period from April 1 to the date the charges are proved. Moily met investors, financial institutions and analysts here last night ahead of the forthcoming NELP Round X auctions beginning mid-January. He said unlike the flurry of negative news regarding the issues between the government and RIL, the only major issue is the arbitration settlement, which is pending with the courts now. "We have, over the past few months, cleared as many as USD 7 billion worth investment proposals submitted by RIL," the minister said, adding that the media was only headlining the negative news. Moily said he expects the Supreme Court to appoint a third arbitrator at the earliest so that the issues between the nation's largest private company and the government could be resolved at the earliest. The ministry had recently asked RIL to provide a bank guarantee of USD 135 million every quarter to get a higher price for natural gas from April 1. The guarantee will be encashed if it is proved that RIL hoarded gas or deliberately suppressed production at the Dhirubhai-1 and 3 (D1&D3) -- main gas fields in its Eastern offshore KG-D6 block. It will cover the difference between the current gas price of USD 4.2 per million British thermal units and the proposed new rate of USD 8.4 per million Btu. The ministry had earlier proposed that RIL should be forced to sell gas from the D1&D3 fields at the current rate until it is proved that the 80 per cent fall in output was due to natural reasons or it makes up for the shortfall in production since 2010-11. The penalty in the form of the lower gas price would have been the second imposed by the ministry on RIL for falling short of the stated production targets. It had already levied a USD 1.8 billion penalty for the output drop and the issue is before arbitration. Gas production from the D1&D3 fields has fallen to less than 10 million standard cubic metres per day from the peak of 54 mmscmd in March 2010. Production has been lower than the target since the latter half of the 2010-11 fiscal and it should currently have been 80 mmscmd, as per the 2006 investment plan.

Naming of RIL's insurance venture to be watchfull

With Reliance Industries buying out Bharti Enterprises' 74 percent stakes in two insurance joint ventures -- Bharti Axa Life Insurance and Bharti Axa General Insurance, the question that begs an answer now is how the acquirer would rename the two companies.

With the Bharti group exiting the insurance companies, its name normally will not figure after the acquisition is completed.

The deal between Bharti and Reliance Industries will not disturb the French group Axa's 26 percent holdings in the two insurance companies.

Names of major ventures of the Reliance group always start with the word 'Reliance'. But the Mukesh Ambani-led Reliance Industries will find it difficult to rename the two acquired insurance companies with the word 'Reliance' as a part, industry sources told preferring anonymity.

The Anil Dhirubhai Ambani Group (ADAG) led by Anil Ambani, younger brother of Mukesh, already operates life and general insurance companies under the name Reliance Life Insurance Company Ltd and Reliance General Insurance Company Ltd.

According to Company Law, similar sounding names will not be permitted for usage. It is more so in the case of financial services business that deals with long term savings of the people.

"The word Reliance has good brand equity in the business field. It will be interesting how Reliance Industries plans to leverage that brand equity. Perhaps RIL Axa could be one way out," sources said.

Meanwhile, employees of Bharti's two insurance companies have been intimated about the stake sale.

According to industry sources, the insurance regulator has also been intimated about the stake sale.