RCom and Reliance Jio sign intra-city infrastructure sharing pact

Reliance Communications, controlled by billionaire Anil Ambani, said on Monday a master services agreement signed was based on "arm's length pricing at prevailing market prices".

Reliance Industries is controlled by India's richest man Mukesh Ambani, and its telecommunications unit Reliance Jio Infocomm Ltd is the only company to have nationwide 4G permits. The company has yet to start commercial services.

Reliance Jio last year agreed to lease Reliance Communications' inter-city fibre for its 4G network, in the first business tie-up between the once-feuding Ambani brothers. Later in the year, it signed a $2.1 billion pact for leasing Reliance Communications' mobile phone towers.

Reliance Communications had previously said it was in talks with Reliance Jio to share its intra-city fibre assets.

Reliance Jio has separately signed infrastructure pacts with mobile phone market leader Bharti Airtel, and tower companies Bharti Infratel and Viom Networks.

Reliance signed its infrastructure pact with Bharti Infratel as recently as March, where the two companies signed a master services agreement and pricing would be at 'arm's length,' based on prevailing market rates.

According to sources, Reliance Jio, the telecom arm of Reliance Industries is likely to launch its 4G services by September this year starting from Delhi and Mumbai.

"This agreement is in line with our earlier comprehensive telecom infrastructure sharing arrangement with Bharti Airtel Limited aimed at avoiding duplication of infrastructure, wherever possible, and to preserve capital and the environment," Reliance Jio MD Sanjay Mashruwala said.

© Thomson Reuters 2014