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Motorola, HP may strike deals with Reliance Comm

G. Rambabu

NEW DELHI, Jan. 13

CLOSE on the heels of Qualcomm's strategic equity investment in Reliance Communications Ltd (RCL), two other ``big fish'' - Motorola and Hewlett-Packard - are likely to strike similar multi-million dollar deals with the telecom arm of Reliance.

According to industry sources, talks on this front are still in a preliminary stage and no concrete deal has been finalised yet. However, if it does go through, both the global giants would, like Qualcomm, hold minority stake in RCL.

With Qualcomm stating that it would be acquiring four per cent stake vide its $200 million investment, the combined stake of Motorola and HP, if it materialises, was expected to bring the total sell-off of Reliance's stake in the company to around 10 per cent, sources said.

However, both Motorola and HP have officially denied plans of buying into RCL. They pointed out that with Reliance planning to roll out its basic services across the country over the next couple of months, it was but natural that talks were on for infrastructure deployment.

According to Mr Pramod Saxena, Country Head, Motorola, ``we have been negotiating with Reliance for equipment and network deployment for their basic services roll-out. However, the question of picking up equity stake has not yet arisen,'' he said.

Officials of Reliance Communications in Delhi, while not denying the possibility, said that the company had been holding negotiations with several companies who had expertise in CDMA (Code Division Multiple Access) deployment. Its basic telecom services were scheduled to be launched on the CDMA platform and Internet protocol (IP)-based network, they said.

The sources noted that both Motorola and HP had much to gain by teaming up with Reliance in its telecom venture.

Since the world's first deployment of commercial CDMA network in Hong Kong in 1995, Motorola has been awarded with over a hundred CDMA contracts. It is also the leading CDMA equipment supplier in Asia. What is more, it has also partnered China United Communications Corporation (China Unicom) for its official roll-out of the nationwide CDMA network on January 8.

They noted further that it was the first company to supply CDMA infrastructure and fixed wireless terminals to Bharti Telenet for its basic services operations in Madhya Pradesh.

As regards HP, the computing giant would provide IT-based solutions for Reliance's basic and broadband telecom services. The agreement would mean that HP would be the sole solution provider for the IP-based network currently being deployed across 18 circles in the country.

Reliance has already committed an investment of Rs 25,000 crore over the next five years for its foray into communications business. It plans to roll out basic telephony, followed by national and international long-distance services.

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