India wireless auction: Reliance buys stake in Infotel

India's richest man Mukesh Ambani is the chairman of Reliance Industries

Reliance Industries has said it is paying 48bn rupees ($1bn; £700m) to take a 95% stake in Infotel Broadband, which emerged as the surprise winner in India's wireless broadband auction.

Infotel was the only company to win broadband spectrum in all 22 service areas. Five other firms also won spectrum in some areas.

The auction has raised about 383bn rupees for the Indian government.

Last month, India's 3G mobile auction raised about 700bn rupees.

High prices

The results of the broadband wireless spectrum auction - effectively a sale of slices of the available airwaves - were announced by the Department of Telecommunications after 117 rounds of bidding.

Bharti, Tikona, Aircel, Augere and US chipmaker Qualcomm were the other successful bidders.

Two of India's largest telecoms operators, Vodafone and Reliance Communications, who both won spectrum in the 3G auction, dropped their broadband bids after prices rocketed.

Infotel is paying about 128bn rupees for spectrum in all zones.

Commenting on the deal with Infotel, Reliance Industries chairman Mukesh Ambani said: "We see this as the next wave of value creation opportunity in the wireless broadband space."