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Bharti, Reliance Jio in major infra sharing pact
11-12-2013

Comes in the wake of a rise in costs driven by security, localization requirements


Bharti Airtel and Reliance Jio Infocomm today announced a comprehensive telecom infrastructure sharing arrangement under which they will share infrastructure created by both parties. This will include optic fibre network ? inter and intra city, submarine cable networks, towers and internet broadband services and other such opportunities identified in the future.

This mega deal, which is even bigger than the infrastructure sharing Reliance Infocomm has signed with Anil Ambani's Reliance Communications, is unprecedented. It will mean sharing of infrastructure for a whole range of telecom services and not just in one state but across the country.

A joint statement by the two companies said the arrangement could, in future, be extended to roaming on 2G, 3G and 4G and any other mutually benefiting areas relating to telecom, including but not limited to jointly laying optic fibre or other forms of infrastructure services. As part of this arrangement, Bharti and Reliance Jio have already announced an agreement under which Bharti has provided capacity on its i2i submarine cable to Reliance Jio.

The partnership comes in the wake of a rise in costs due to higher security and localization requirements. It will need careful handling by both sides, which have till now functioned pretty much as arch rivals.

Interestingly, the partnership 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 the partnership 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 no 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.

From a report by Firstpost


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