Reliance Communications Ltd (RCOM), country’s largest CDMA mobile service provider, is believed to have awarded a nationwide GSM rollout contract to China’s leading telecom company Huawei Technologies.

While RCOM and Huawei officials declined to comment on the deal, it is expected that an official announcement will be made very soon. Sources close to the deal told Deccan Herald that RCOM’s contract to Huawei is worth over Rs 2,000 crore ($500 million).

Future prospects

Huawei will supply complete network equipments and telecom solutions to RCOM which is planning to set up GSM network in 14 telecom circles spread over 20,000 towns and six lakh villages. RCOM recently got spectrum from the government for setting up GSM mobile network in 14 circles. RCOM’s equipment contract to Huawei is the first nationwide GSM rollout contract and largest in the country so far.

Under its GSM rollout plans, RCOM plans to invest over Rs 6,000 crore in GSM electronics alone. RCOM’s plan is to deploy next generation IP enabled GSM network. RCOM currently holds close to 60 per cent share of the CDMA market which stands at 61 million as on December 2007. 

Industry watchers believe that for its GSM services RCOM will be able to extract substantial economies of scale from its existing CDMA infrastructure and thereby its roll out will be faster than normal.