Canada's export credit agency, Export Development Canada, will give $150 million to Reliance Communications (RCom) to purchase telecom 
technology and services from Canadian suppliers. One such firm, TenXc Wireless, has been roped in to increase the efficiency of spectrum allotted to RCom for its GSM network.

With a little over eight million GSM subscribers added every month, private sector telecom operator RCom has been preparing itself to increase its GSM presence in the country by mid-December. Sources indicate that the funds will be used to drive deeper coverage to complete the firm's nationwide roll-out by mid-2009. RCom currently has a market share of only about 4% in the GSM space. The bulk of RCom's current subscriber base is on the CDMA platform. The CDMA players add slightly over two million subscribers every month.

RCom hopes to use the funds to tap into the existing 172-million-plus GSMcustomers. The financing has a long-term repayment tenor. Sources maintained that RCom's GSM revenue strategy would be to focus on building market share in the incoming international roaming segment, given that the top 10 Indian cities account for almost 80% of incoming international roaming revenue, at approximately $1 billion (Rs 5,000 crore) annually.

An RCom spokesperson, however, declined to comment on the firm's GSM foray or the new tranche of finance from the EDC.

EDC's current funding is in addition to the $250 million provided to RComearlier this year, to purchase telecom equipment from Alcatel-Lucent. Even as global financial markets reel under a slowdown, the amount represents EDC's largest transaction in India in the current year, taking the total funds emanating out of Canada for Indian telecom to $550 million.

EDC, a Canadian export credit agency, is a known face. In 2007, in its first equity investment in India, EDC pumped in $7.14 million in the second SME fund of an Indian private equity firm, Avigo Group. In 2007, EDC's services and deal structuring capabilities helped facilitate $77 billion in transactions for Canadian companies.

With an average of 10 million mobile users being added each month, according to the Telecom Regulatory Authority of India (Trai), wireless service providers have an urgent need to improve radio frequency network efficiencies to support customers and to be able to meet the growing demand for new high-speed data services. There are currently a total of 325.73 million mobile phone users in the country.

An industry analyst said: "Radio spectrum remains a scarce resource for mobile operators in India and its efficient utilisation is direly needed to accommodate additional subscribers in one of the world's fastest growing mobile markets.''

Source:timesofindia