RIL plans broadband rollout plans with 'Operation Vijay'

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RIL plans broadband rollout plans with 'Operation Vijay'

Mukesh Ambani's Reliance Industries is putting in place the building blocks for a nationwide rollout that it hopes will surpass the voice services rollout of a decade ago, reports CNBC-TV18's Sajeet Manghat.

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Excerpts from India Business Hour on CNBC-TV18 Watch the full show » Reliance BSE | NSE 31/05/12 Are Mutual Funds betting on Reliance?

Over a year after shocking everyone with a USD 3 billion purchase of a nationwide license to offer fourth generation wireless broadband in India, Mukesh Ambani's Reliance Industries is putting in place the building blocks for a nationwide rollout that it hopes will surpass the voice services rollout of a decade ago, reports CNBC-TV18's Ashwin Mohan.

Less than a decade ago - Reliance uncorked 'Operation Genie' with a limited mobile voice service that priced calls at 40 paisa a minute. That service was launched by Mukesh and the late Pramod Mahajan. Anil Ambani was not present at the launch ceremony and the group was yet to split.

Cut to now: The two brothers have called a cease fire and decided to compete in select businesses.

That is the genesis of yet another Mukesh Ambani operation - this time named "Vijay" or victory. Although, it is yet to be formally unveiled, insiders suggest that the tent poles of the broadband network are being put in place.

RIL spent USD 2.8 billion to buy a 95% stake in Infotel Broadband. It is now investing a near similar amount in the services rollout. While details on the technology architecture and related elements are yet to become public, insiders suggest that the service will be extremely "affordable" - even more than third-generation services that are available currently.

Why? While the average cost of 3G spectrum acquired by mobile operators works out to 32 cents per person per Mhz, RIL acquired competing spectrum at nearly one-sixth of the price.

That, along with RIL's famed project skills and financial muscle, should ensure that the service lives up to its proposed tagline: Easy to Access, Simple to Use, Available to Everyone.

In effect, while all existing mobile operators are working towards a gradual increase in tariffs to improve margins, big daddy Mukesh may just end up spoiling the pool party. Will Anil Ambani be watching from the sidelines or will it be a family victory?