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Bobby Kurian
K. Giriprakash

Bangalore , May 5

RELIANCE Infocomm is all set to offer handset prices for less than Rs 1,500 in an attempt to accelerate its customer acquisition spree.

A top Reliance Infocomm official told Business Line that the company is poised to slash handset prices by over 50 per cent in the next three months.

"We are working towards reduction in handset prices. Higher handset prices are a major deterrent for growth in a price-sensitive market like India. Talks are on with handset vendors for bringing down the price to $30 (less than Rs 1,500) a piece from the existing price band of $60 a piece. We hope to hit the market with new handset pricing over the next three months," the official said.

Reliance Infocomm, a wholly-owned subsidiary of Reliance Industries Ltd, is targeting a 10-fold increase in its subscriber base from the current 10.2 million to 100 million over the next 35 months, the official said.

This would place the company next only to China Telecom and China Unicom, the top two telecom companies in the world, whose subscriber base has been projected at around 150 million each by March, 2008.

"The reduction in handset prices along with our cheapest service cost and new value added features such as video-on-demand will power our new phase of growth in terms of customer acquisition," the official said. "Technology teams are developing suitable platforms for high-end applications including video-on-demand that will enable subscribers to meet their information, communication and entertainment needs from a single source. With this, subscribers can watch their favourite programming by desire and not by appointment," he said.

Reliance Infocomm started operations in December 2002 with an initial investment outlay of Rs 24,000 crore, which will be completed by the end of the current calendar year.

The company has already made an investment of Rs 15,000 crore in infrastructure including 80,000 km of optic fibre network covering nearly 90 per cent of the country's population.

A fresh investment of Rs 9,000 crore is lined up to reach out to India's four lakh villages and 5,700 cities and towns by the year-end.

Sources disclosed that the progress is being closely monitored by the group Chairman and Managing Director, Mr Mukesh Ambani, in view of the economic and developmental implications of this project.

Reliance Infocomm posted a net profit after tax of Rs 51 crore for the year ending March 31, 2005 against a loss of Rs 390 crore during the previous year.

The company posted a turnover of Rs 5,387 crore for the year ending March 31 (Rs 2,707 crore), recording an increase of 99 per cent.

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