RCom, Vodafone to enter roaming pact, share 3G spectrum in Mumbai, Delhi

Telecom operators Vodafone and Anil Ambani group company Reliance Communications are in advanced talks to share 3G and 2G intra-circle roaming (ICR) pacts across five circles, including Delhi, Mumbai, Bihar, West Bengal and Odisha, in order to reduce their operational expenses as well as improve service quality.

The two telecos are also expected to sign an agreement for sharing 3G spectrum in Delhi and Mumbai circles following 2G pacts for the five circles.

A pact for sharing of spectrum with RCom will help Vodafone as it would open up readily available spectrum at a time when RCom is already in talks with Reliance Jio for sharing 4G airwaves.

The deal could enable RCom to continue its 2G service by using Vodafone's spectrum in Bihar, West Bengal and Assam, where it has only 3G spectrum, but has strong network penetration.

Under 3G intra circle roaming pact, telecom operators without 3G spectrum in a circle use their partner's network to sell and operate the services.

The telecom tribunal had upheld such agreements although the Department of Telecom had challenged 3G intra-circle agreements.

The talks are expected to conclude within three-four weeks, according to reports.

The heavily indebted RCom has, meanwhile, been looking to lower the cost of ownership and monetise the assets to lower debts.

Earlier this month, the Anil Ambani-led firm signed a non-binding pact to sell its cellular towers to private equity firm Tillman Global Holdings LLC and TPG Asia Inc at an estimated Rs30,000 crore deal to pare debt.

The deal is estimated to pare Reliance Communications' (RCom) consolidated debt by 60 per cent, according to brokerage firm CLSA. RCom will also have lowest debt among Indian telecom operators while Vodafone will lower its operational expenses, sources said.