RIL's Infotel may buy $1 billion 4G network gear from Samsung Electronics.
Reliance Industries-owned Infotel Broadband is likely to procure over $1 billion (about 5,500 crore) of network gear from Samsung Electronics to meet a sizeable chunk of its fourth generation equipment requirement.
Executives familiar with the matter told ET that talks are at an advanced stage for supply of LTE, or long-term evolution technology, network gear to launch the first wave of Infotel's 4G services in Mumbai and Delhi. The two companies have also discussed potential bundling of a 4G handset and devices supply deal within the contract, the executives said.
The entry of the South Korean conglomerate in India's telecom infrastructure market is expected to intensify competition in a sector where most operators have lowered capital expenditures, entailing fewer contracts for equipment providers and more pressure on their profit margins.
While Samsung said it would not comment on speculation, Infotel Broadband declined to comment on the specifics of the deal.
"Infotel Broadband Services has, and continues to be, engaged in discussions with numerous potential partners where a partnered approach creates win-win-win opportunities for IBSL, its customers and its partners. Given the strategic and confidential nature of the ongoing discussions, we are unable to confirm or comment on any specific discussion," said a Reliance Industries spokesman, in a written response to ET's email query.
Infotel has asked Samsung to supply, for its ongoing equipment trials, about 3,000 base stations, which may be eventually deployed in Mumbai, an executive said.
Infotel is likely to initially source a mix of Samsung's SmartMBS multi-standard base stations and small-cell LTE base stations, the executive said, adding that the 4G base stations are likely to be priced between $15,000 (about 8 lakh) and $20,000 (about 11 lakh) a piece.
"Reliance is in talks with reputed 4G gear vendors, including Samsung, and will shortly finalise a clutch of equipment contracts that will collectively run into billions of dollars," said an executive, who did not wish to be named.
Besides Samsung, Reliance is believed to be in talks with China's Huawei and ZTE, along with European players such as Ericsson and Nokia Siemens Networks that have more experience in managing the networks of mobile carriers in India.
Infotel is likely to take a final call depending on the ability of the vendors to adhere to the stringent 4G network rollout timelines in addition to offering competitive rates.
"Timelines for the subsequent countrywide 4G push will be fixed after we have tested the waters in Mumbai and Delhi," an executive said.Industry experts say Reliance has an edge over its rivals because it is the only player with pan-India 4G permit, even as the country's leading mobile carrier, Bharti Airtel, had a headstart after it launched 4G services in Kolkata and Bangalore.