BSNL & Reliance Industries Ltd (RIL) set to enter into telecom solution deal

Mukesh Ambani’s Reliance Industries Ltd (RIL) is set to sign a five-year communications solutions deal with Bharat Sanchar Nigam Ltd (BSNL) estimated to be worth Rs 500 crore - reported Economic times. As per the deal, BSNL will link all undertakings of the group during this period, connecting 2,500 petrol pumps, about 15,000 retail outlets, 14 manufacturing units, all its upcoming SEZs and also provide global connectivity to RIL, sources close to the development told ET. The deal envisages that BSNL provide mobile, basic, broadband services, leased lines, virtual private network (VPN), multi-protocol label switching (MPLS) and enterprise solutions to RIL. BSNL will also provide the bandwidth for RIL’s captive network, which interconnects all its outlets and offices. Reports also indicated that the contract would involve providing about 60,000 mobile connections to RIL employees, which could be scaled up later.
The contract with RIL, when signed, would be similar to its agreement with ICICI. BSNL interconnects and provides telecom solutions to all ICICI outlets (including ATMs) in the country, and industry sources estimate the value of this contract to be Rs 100 crore per year. State-owned MTNL, which offers telecom services in Delhi and Mumbai, also stands to gain from BSNL’s contract with RIL. This is because, MTNL will provide all communication solutions to RIL in the two metros, where BSNL is not present.

Earlier, this year, RIL had joined hands with the Bharti group to source mobile and enterprise communication services, which includes mobile, broadband and leased line services, for its retail venture. However, the catch here is that Bharti also plans to use these solutions for captive use for its own retail venture with Wal-Mart. At the same time, Reliance is also planning a pan-India WiMax network for back-end communication needs of its SEZs, which may be extended to meet needs of its retail venture in the long run. Reliance plans to invest about $750 million (Rs 3,400 crore) to obtain spectrum and lay out the network.

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