RIL acquired 95% stake in IBSL soon after the latter acquired a pan India 4G license (22 circles). IBSL had bought the spectrum for 12,750cr way back in June 2010. If we consider a risk free interest rate of 7.5%, RIL is losing on an opportunity cost of close to whopping 2.5 crores a day, forget the fact that funds may be raised through debt. On top of this RIL will have to follow a minimum roll-out obligation of 90% of service area within five years of acquiring spectrum which turns out to be Aug 2015. The vision of Digital India proposed by Sh Modi is also heavily dependent on how quickly and with what stability the network is rolled out. Traditionally RIL has launched big initiatives on Sh Dhirubhai’s birthday (28th Dec) but it seems too late this year. We speculate a Diwali launch.
In my last write-up, I covered briefly the history of telecom in India. We discussed different generations of mobile telephony in detail. I ended with a brief comparison between 4G and the rest of the technologies. In this write up we will continue with the comparison but a little later. First we will look at what constitutes a telecom network both from an infrastructure and architecture point of view. We will discuss the architectural similarities between 2G and 4G network and conclude by understanding the mechanism of a phone call in a 2G network. Continue reading “Blog-2: Network Infrastructure & Call Basics”