Reliance Communications and Microsoft have entered into an eight-year exclusive alliance for IPTV services, which the former plans to launch in India by March 2008.

RCom will pay up to $500 million to Microsoft in licence fees for the US company’s Mediaroom IPTV software platform.

“There is no other country where we have signed up an exclusive deal with anybody,” said Mr Steve Ballmer, CEO, Microsoft, at a press conference on Monday.

The deal will also be unique in terms of the scale of deployment that RCom is targeting, “India being a large country with a large population.”

RCom will provide the service first in Mumbai and Delhi, moving to 30 large cities subsequently, said Mr Anil D. Ambani, Chairman, RCom.

The service will be delivered through RCom’s fibre optic network, which covers 13,000 towns and five lakh villages in India.

However, officials from neither company would comment on the pricing strategy for the initiative.

The platform will enable Reliance’s IPTV service to deliver video-on-demand, digital video recording, instant channel changing and personal media sharing. Subscribers will be able to watch popular standard definition as well as high definition content.

The RCom scrip was down by 0.81 per cent on BSE to close at Rs 779.3 on Monday.