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* Plans investment of $11.7 bln in telecoms business
* Raises three-year investment target to 1.8 trillion rupees
* Ambani says market-based prices key to develop energyresources (Adds Reliance forecast for retail business, new board member)
By Aman Shah
MUMBAI, June 18 (Reuters) - India's Reliance Industries Ltd will start offering fourth-generation (4G)telecommunications services next year, its chairman and India'srichest man, Mukesh Ambani, said on Wednesday, a move that willintensify competition in an already crowded market.
Reliance, India's third-most valuable company, gets most ofits revenue from its sprawling energy empire. It has expandedinto new businesses like retail, telecommunications and media inrecent years as growth in its core energy business slows.
Reliance made a return to telecoms in 2010 by acquiring theonly company that had won nationwide 4G airwaves in a governmentauction, but has yet to start services as it builds the businesson an unproven and still-developing technology.
On Wednesday, Ambani told shareholders that Reliance wasplanning an investment of 700 billion rupees ($11.7 billion) inthe telecoms business, Reliance Jio, and would launch servicesin phases across India in 2015.
Reliance's entry into the telecoms sector poses a threat torivals like Bharti Airtel Ltd, Vodafone Group Plc and Idea Cellular Ltd, which in recentquarters managed to raise voice call prices after a years-longprice war.
"Once (Reliance) Jio comes, voice charges will get disruptedbecause they typically bring in cheaper rates," said NaveenKulkarni, a telecoms analyst at PhillipCapital.
Kulkarni, however, said Reliance's planned launch in 2015gives "some cushion" to the existing telecom carriers. Some inthe industry had expected Reliance to start services this year.
Reliance aims to offer high-speed data as well as voiceservices and added more airwaves from an auction this year.
"The objective is to ensure that everything that we offer isfuture-proof and world-class," Ambani told Reliance's annualshareholder meeting. "Limited field trials with our initial setof services for the broad band services are already underway."
Cash-rich Reliance plans to invest more than 1.8 trillionrupees ($30 billion) over a three-year period that ends in March2016 across all its businesses, Ambani said. Last year, thecompany had announced plans to invest 1.5 trillion rupees overthree years.
Reliance expects to double its retail business's sales everythree to four years, said Ambani, whose wife Nita wonshareholder approval on Wednesday to join the company's board.
The unit, the largest retailer by revenue in India's $500billion retail sector, posted its first annual profit since itsbeginning in 2006 in the fiscal year ending March 31.
ENERGY INCOME FALLING
Reliance's move into telecoms are meant to cushion a declinein oil and gas revenue that has been hit by the falling outputfrom its key gas block off India's east coast.
Reliance and its partners in the KG-D6 gas block - BP Plc and Niko Resources - are also locked in adispute with the federal government over the implementation ofhigher gas prices.
Ambani said on Wednesday timely regulatory approvals and"market-based gas prices" were key to developing the resources.
The government in June last year approved a formula, linkingprices of locally produced gas with global benchmarks, thatcould have nearly doubled gas prices from the current $4.20 permmBtu from April 1.
That price increase was ordered to be deferred by theelection regulator ahead of a general election and the newgovernment that took power last month has yet to decide on theincrease.
Reliance shares extended their fall after the shareholders'meeting and ended down 2.1 percent. Some traders said investorswere disappointed by the absence of a plan to resolve the gasprice dispute in Ambani's speech. (Additional reporting by Nivedita Bhattacharjee and AbhishekVishnoi; Writing by Devidutta Tripathy; Editing by Matt Driskilland Louise Heavens)
