Rumours of RIL’s telecom entry gather strength

Adding fuel to the rumours that Mukesh Ambani can't wait to stomp on brother Anil's telecom turf after the scrapping of their 'non-compete' arrangement, a report says the board of Mukesh's Reliance Industries (RIL) has approved plans to enter the Indian telecommunications sector when the opportunity arises. Under the earlier agreement, telecom was Anil's territory and off bounds for Mukesh.

Quoting two unnamed sources, The Economic Times said today that India's largest private sector company is expected to go for only the lucrative corporate bandwidth market, or the business of selling telecom and internet services to companies rather than individuals.

It is likely that the company could unveil its intent to foray into telecom at its annual general meeting on 18 June, the paper said.

The government is currently auctioning frequency spectrum for broadband wireless access, or WiMAX, a technology that speeds up internet access, and RIL is likely to set up a special purpose vehicle (SPV) to acquire one of the winners.

The RIL board met recently to endorse these plans, the paper said citing a person who has seen a copy of the resolution passed at the meeting.

Mahendra Nahata-owned Himachal Futuristic's arm Infotel Broadband Services could be a candidate for acquisition by RIL, the report further adds. Infotel is among the bidders in the broadband wireless auction.

Nahata refused to comment on whether RIL or any of its arms intended to buy the company. The RIL spokesman declined to comment on the company's future telecom plans.

Infotel is separate from the rest of Himachal Futuristic, which operates telecom services in Punjab and offers some leased-line services. Infotel is a two-year-old entity, with the stated objective to roll out WiMax across all circles in India.