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Sunday, March 15, 2009

Reliance Communication India - Ready To March Ahead With 3G Broadband

Buy stocks rated stock research report from IIFL on Reliance Communication India based on latest business update. RCOM has upgraded its CDMA network to 3G and launched wireless broadband under the name Reliance Netconnect Broadband Plus. This is a significant positive for RCOM and enables it first-mover advantage (with 3G auctions postponed, no operator would be able to match its offerings) and also take better advantage of mobile number portability (MNP), expected later this year.

Broadband wireless service launched

Wireless broadband services launched by RCOM in 35 cities:
The product will be available in 35 top cities of India, from 17 March, in the form of data cards and USB devices and will enable download speeds of up to 3.1 Mbps. Downlink speeds can reach 1.8Mbps (these are peak rates under controlled conditions, and effective consumer user experience will be significantly lower, though enterprises should reach close to the promised speeds). There will be seamless connectivity between the 2G and 3G CDMA networks, for uninterrupted data experience. As per media reports, the company has already placed a Rs3bn order for 1m modems with Huawei and ZTE, with the first 100,000 modems expected to be delivered within a week’s time.

Also read: Best stocks to buy in Indian telecom sector

Device priced at Rs3,500, with unlimited night plan of Rs499:
The regular plan is for a fixed rental of Rs299 per month plus usage based charges. However the unlimited night-time plan priced at Rs499 per month may see very high volume usage (movie downloads).

First-mover advantage, as 3G GSM delay will be a handicap for others:
RCOM's nationwide CDMA network has enabled it to economically launch this on a pan-India basis. With GSM 3G auctions indefinitely postponed, major GSM operators will not have an opportunity for the present to match this offering. Broadband revenues account for 10-15% of aggregate revenues for major telecom operators in India, with the target markets being corporate as well as home broadband users.

RCOM has upgraded its CDMA network to 3G and launched wireless broadband under the name Reliance Netconnect Broadband Plus. The product will be available in 35 top cities from 17 March in the form of data cards and modems. The company has already placed a Rs 3 billion order with Huawei and ZTE for 1m such USB modems, with 100,000 modems expected to be delivered this week. We believe that this is a significant positive for RCOM and enables it first-mover advantage (with 3G auctions postponed, no operator would be able to match its offerings) and also take better advantage of mobile number portability (MNP), expected later this year. BUY stocks of RCOM for a target price of Rs 220.

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