RCOM holds on to optic fibre network

MUMBAI: With Reliance Communications divesting 50,000 telecom towers, is the company getting out of the telecom infrastructure rat race? Not by a long shot. The $11-billion deal involves only passive infrastructure, (read telecom towers ), and not the pan-India optic fibre capability that Reliance Communications (RCOM) boasts of. The optic fibre network of over 200,000 kms and related assets, presently owned by Reliance Infratel, is to remain under RCOM's ownership.

Why has the telecom major decided to hold onto it? For one simple reason: fibre optical modules are the future. Unlike telecom towers that are only geared for mobile operators, optic fibre networks can provide solutions for everything between enterprise connectivity to IPTV, and beyond. Optic fibres are also set to get a major push with the launch of 3G and BWA services in the country. Optical fibre systems have many advantages, the most noteworthy of which are wide bandwidth and low data latency . While the former ensures more data, the latter ensures a near instantaneous connection. More bandwidth will allow for massive amounts of data to be plied across corporations, while near instantaneous data is an essential need of most corporates and individuals.

In February this year, RCOM decided to transfer its optical fibre business to Reliance Infratel. The transfer was undertaken through a court-approved demerger of the unit at a fair value. The consolidation of the optical fibre division reflected the global trend of segregating the telecommunication infrastructure business. Earlier, on May 26, 2009, RCOM's shareholders had also approved the scheme of arrangement between RCOM and Reliance Infratel for the demerger of the optic fibre division.