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Published 25 July 2012 11:32, Updated 26 July 2012 04:16
Expert’s tip Mukesh Ambani’s planned 4G mobile phone network to cost more than $US10 billion to build. Photo: Adam Berry
Via The Wall Street Journal comes the story of Mukesh Ambani’s ambitious plan to build one of the world’s largest and most advanced mobile phone networks.
For those who aren’t familiar with him, Ambani (55) is chairman of conglomerate Reliance Industries, India’s richest man and No. 19 on Forbes’ billionaires list with estimated wealth of $US22.3 billion. He also features as No. 35 on the Forbes list of powerful people.
According to the WSJ, Ambani embarked on a plan in 2010 to build a massive 4G network reaching deep into India, including great swathes of the country that have little to no telco infrastructure thanks to the poor penetration of fixed line services.
Ambani – who owns a 27-storey monolith that’s believed to be the world’s first $US1 billion home – envisages a network pumping out services to mobile phones, mobile computers and televisions, as well as a pair of 28,000 square metre data centres serving up cloud computing services to businesses and consumers.
So far Reliance, which was founded by his father Dhirubhai, has shelled out $US3 billion for mobile spectrum spanning the country and analysts are tipping it will spend at least $US10 billion to achieve Ambani’s vision.
4G field trials are under way near the site of a Reliance oil refinery in the western Indian town of Jamnagar and the company has also started laying fibre-optic cabling that will form the backbone of a network of as many as 60,000 mobile phone towers.
Spelling out the detail, the WSJ says Reliance is still trying to keep the project hush-hush and that the project is already running into “hurdles”, such as the higher than expected cost of putting up 4G towers in remote areas and the fact Ambani has settled on a flavour of 4G that big name handset makers such as Samsung and Apple don’t support yet.
That’s coming against the backdrop of Ambani needing to score a win.
Says the WSJ: “Lately, Mr Ambani’s reputation has taken something of a hit with investors. Reliance hasn’t been able to produce as much natural gas as it projected from the nation’s largest reservoir, denting its profit. And Mr Ambani has struggled to expand Reliance into consumer markets. Most notably, a vast network of retail supermarkets hasn’t fared well, analysts say.”
“The pressure is on Mr Ambani to start the [4G] rollout soon. Reliance is the only company with a nationwide wireless broadband licence, but it will face significant competition. Bharti Airtel, India’s largest wireless carrier, launched 4G service in Kolkata and Bangalore earlier this year, and it is planning more launches soon. Moreover, Mr Ambani’s spectrum licence requires that the network reach 50 per cent of rural market areas by 2015.”
If things do head south, Ambani won’t find any controversy that arises a new experience.
The billionaire, who serves of the board of directors of Bank of America Corporation and is a member of the international advisory board of the Council on Foreign Relations, famously feuded with his brother Anil (52) throughout much of the second half of the noughties over the family fortune.
The dispute centred on the family’s natural gas interests and provoked attempts at intervention by India’s top politicians, as well as the men’s mother.