RIL plans low-cost telecom towers to gain competitive edge

Reliance Industries is believed to be working on ultra-low cost base stations, which are used to transmit signals for telecom services, costing just Rs one lakh each. At this price point, the cost of the proposed towers would be as low as 1/40th of the base stations deployed by some leading mobile phone service providers.

These low-cost towers are part of the strategy of country’s largest private sector enterprise as it gears up for its foray into telecom space through Infotel Broadband. Industry sources said some leading telecom companies are using telecom towers costing as high as Rs 30-40 lakh, while some of the low-cost towers cost Rs 15-20 lakh. Some Chinese firms, however, claim to have developed telecom towers worth Rs 5-10 lakh. Costs vary as per the volume of the order and transmission capabilities, among other factors, said experts.

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“Infotel is planning to build its network with a mix of rented mobile towers and its own BTSs (base tower station or mobile towers). The BTSs that Infotel is working on are expected to cost it Rs 1 lakh each,” a source said.

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A RIL spokesperson declined to comment on the issue. The rentals for telecom towers also varies between Rs 30,000-50,000 per month, making the proposed base stations of RIL group a very cost-effective model, sources said.

Besides an estimated one lakh towers of its own, RIL group would also consider leasing out the base stations from third parties, sources aware of the developments said. Infotel is focussing on a low-cost model so that it can keep the rates of 4G telecom services lower than that of other players. The services may be launched as early as 2012-end, but there is more likelihood of launch in 2013. In earlier days, the cost of setting-up of stand-alone BTSs (mobile towers) was Rs 50-60 lakh. With advancement in technology, it has come down to Rs 30-40 lakh for a high quality tower.

Infotel Broadband had earlier floated tender for its plans to deploy base stations at around one lakh locations, after which some tower companies offered to rent out their towers. This it would have to share with other telecom companies as well. The rentals were offered in a wide range of Rs 15,000-50,000 per month, excluding various on-site costs. Infotel is also likely to manage on its own the network, IT infrastructure and other services, which are normally outsourced by telecom operators to keep operational costs low. At present, only Bhart Airtel and state-run telecom company BSNL provide 4G services in the country out of eight firms that hold BWA spectrum.

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