Barely hours after Infotel Broadband Services Ltd won the auction for India’s Wireless Broadband Access (BWA), Reliance Industries Ltd (RIL) made a surprising move by acquiring 95% stake in the company owned by the Nahata family. This will pit the Ambani brothers against each other in the telecom sector, which is permissible after the annulment of the non-compete agreement less than a month back.

Infotel Broadband is the successful bidder for all 22 circles at Rs 12,848 crore. The BWA spectrum auction held by Department of Telecommunications (DoT) raked in Rs 38,000 crore. Together with the 3G auction spoils of last month that earned Rs 67,720 crore, the government gets more leverage to bring down the ever-widening fiscal deficit gap.

In the BWA auction, Aircel successfully bid for eight circles for Rs 3,438 crore. Bharti Airtel and Qualcomm Inc managed to corner four circles each. Eleven companies participated in the BWA auction for two bandwidth slots in the 22 circles. The BWA spectrum will make it possible to use hi-speed technologies like Wimax that is faster and more traversable than WiFi.

The latest move by Mukesh Ambani of RIL will place him in direct competition in the telecom sector with his estranged brother Anil Ambani of RCom, the country’s second largest mobile service provider. However, RCom had earlier pulled out of the BWA auction after it succeeded in the 3G auction of last month.

This is homecoming for Mukesh Ambani in the telecom sector after he was forced to forgo the telecom business to his younger sibling in the division of Reliance group.

“We see this as the next wave of value creation opportunity in the wireless broadband space. We believe this will pole-vault India’s economy into the digital world at an accelerated pace,” said Mukesh Ambani.

Wireless broadband internet services market in the country is expected to grow 100-fold in the next five years.

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