Last week, minister of state for communication and IT Milind Deora had appealed to the telecom industry to sort out differences among them for development of the sector. Do we see a new beginning?

New Delhi: If this partnership does work out, it could well change the face of the Indian telecom industry. Agency reports coming in late this evening quoted Reliance Industries' Chairman Mukesh Ambani speaking of a collaboration with Bharti Airtel's Sunil Mittal for 4G services in Punjab.

"For further enhancing the digital experience, we can have a collaborative partnership with our friend Mr. Mittal," Ambani was quoted saying by PTI. He was speaking at the Progressive Punjab Summit and announced Rs 2500 crore investment in rolling out digital infrastructure for fourth generation or 4G telecom services. Incidentally, Bharti also announced a Rs 4,000 crore investment in 4G in the state this morning.

So why is Ambani's olive branch important? Well, first it comes just a few weeks before the spectrum auctions in January where there is expected to be a fierce fight between incumbent telcos including Bharti and Vodafone for retaining the precious 900 mhz spectrum in Delhi and Mumbai circles. And Reliance, which has no spectrum in this band, could well play spoilsport by jumping in the fray.

In Mumbai, for example, analysts have already pointed to the possibility of both Bharti's Mittal and Ambani possibly looking to acquire 900 mhz spectrum. Not only could this drive up prices of this scarce spectrum band, it could also ensure that either company gets a better grip of the 3G market because 900 mhz can easily be used to provide 3G services.

The second reason today's comments could be interesting is the traditional rivalry between the two telecom companies even in 4G. Reliance is the only company which holds a pan India 4G license but is yet to begin services. It has begun testing process but there is still now word on whether it will also offer voice along with high speed data on its 4G network and by when will roll out begin.

Whereas Bharti has already gained first mover advantage by launching services in some circles and is now planning to extend this, possibly to voice in Bengaluru. Airtel and the Government of Punjab today signed an agreement under which Airtel will take its high speed 4G LTE services to all towns and villages across Punjab and put the state on the data superhighway.

Airtel launched Punjab's first 4G LTE services in Chandigarh in March 2013 and as part of the agreement, the company will lay an additional 10,000 km of optic fiber across Punjab and expand its 4G footprint to cover most of the state's population over the next few years.

The PTI story quoted earlier said today was the second time Ambani extended a hand of friendship towards Mittal. In April, their companies joined hands to share capacity of a submarine cable. Last week, minister of state for communication and IT Milind Deora had appealed to the telecom industry to sort out differences among them for development of the sector.

Do we see a new beginning?

Disclosure: The Reliance Group has funded the promoter of Network18, which publishes Firstpost