R-Com launches 3G, sees no price war

R-Com launches 3G, sees no price war

Mumbai: Reliance Communications (R-Com) on Monday launched third-generation (3G) mobile phone services in four cities, and said it will cover 13 telecom zones by March next year.

Shares in India’s No. 2 mobile carrier, valued at about $6 billion, rose as much as 2.5% after the announcement, as investors hoped the new service would boost the company’s earnings potential.

The third-generation (3G) services will facilitate faster Internet on mobile phones and help operators grow their data revenue in a market where voice calls account for close to 90% of companies’ revenue.

“Non-voice revenue should go up to 30% for the industry in the years to come. We should be at the higher end of this," Syed Safawi, chief executive of the company’s wireless business, said at a media briefing.

Non-voice revenue contributes “higher than 12-13%" currently, he said, but declined to give an exact proportion.

The company will offer 3G service plans starting from Rs199 ($4.4) a month to Rs2,499 a month, he added.

Reliance Comm, controlled by billionaire Anil Ambani, spent $1.9 billion in winning 3G radio airwaves for 13 of India’s 22 telecom zones in an auction this year, which saw bids coming far higher than expected.

“We don’t see a price war in 3G. Even 2G prices are stabilizing. The competition will be on content and innovation in services," Safawi said.

“We will be very competitive and will stay mark-to-market," he added, referring to pricing of its 3G services.

A vicious call price war last year amid stiff competition in the 15-player market has almost halved call prices.

R-Com’s 3G launch comes after No. 4 mobile carrier Tata Teleservices launched its 3G services last month and said it will roll them out by the end of this year across the nine telecom zones for which it has 3G permit.

Top mobile operator Bharti Airtel has said it will launch 3G services by end-December, while Vodafone’s Indian arm will launch the services in the January-March quarter.

R-Com is targeting a national footprint of 3G services by partnering with other “like-minded, quality 3G licensees" in the remaining nine telecom zones during the course of next year, it said in a statement.

For non-3G circles, Reliance Communications is looking to expand its high speed data network, Safawi said, declining to give any more details.

Shares in Reliance Communications closed 2% higher at Rs128.65 in a strong Mumbai market.