Reliance Telecom

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In May 1997, Department of Telecommunications, Government of India, awarded a 10 year license to Reliance Telecom to offer fixed-line services in Gujarat, West Bengal, Orissa and the North-east along with a limited GSM mobile service in 7 Telecom Circles encompassing 10 States of India. Reliance Telecom was formed as a joint venture between Reliance Industries (90%) and Nynex International (10%) in late 1996/early 1997. However, Nynex withdrew from the JV in June 1997 before commercial operations began and the company sold approximately 45% of its stake to undisclosed foreign investors in late 1997. In March 2006, Reliance Telecom became a wholly owned subsidiary of Relicance Communicationss Limited. The 10-year cellular license was awarded in May 1997 at a cost of US$94.1 million. The total project cost was estimated at US$414.11 million. Reliance Telecom originally closed financing on US$138 million of the project through a flotation in 1997. Motorola Inc. and Sweden's LM Ericsson teamed up to supply base-station equipment to India's Reliance Telecom in a deal worth US$130 million. Most of the financing was to be provided by the equipment suppliers. Motorola also won a contract worth US$300 million to supply radio equipment. Reliance Telecom launched commercial services in Spring 1997 in Orissa and was operating in West Bengal and Bihar by the end of 1998. Operations for Reliance Telecom’s network in Gujarat began in 1999 with approximately 100,000 installed lines. As of late 2003, Reliance was working on slowly phasing out its GSM operations in favor of the CDMA-based mobile services provided by its much larger sister company, Reliance Infocomm. As of December 2004, Reliance Telecom had over one million GSM subscribers and 1.4 million fixed line subscribers. Fax sent to Mr. S P Shukla, FAX NO.: 91 22 2762 5198 The investment figures of 2005 are included in Reliance Communications Limited (2520).