Bharti, Reliance Jio to share telecom infra

The Mukesh Ambani-controlled Reliance Jio Infocomm and the Sunil Mittal-led Bharti Airtel — two players that could soon be seen locking horns in the 4G long-term evolution (LTE) space — on Tuesday signed an agreement to share telecom infrastructure.

This includes sharing of inter- and intra-city fibre-optic networks, submarine cable networks, towers and internet broadband services, besides other opportunities identified later. In a joint statement, the two said the cooperation was aimed at avoiding duplication of infrastructure, wherever possible, and to preserve capital and the environment.

“This will... ensure seamless services to customers of both parties. The arrangement could, in future, be extended to roaming on 2G, 3G and 4G, and other mutually-benefitting areas relating to telecommunication, including, but not limited to, jointly laying fibre-optic or other forms of infrastructure services. The pricing would be at ‘arm’s length’, based on prevailing market rates,” the joint statement said.

CONNECTING

Other telecom deals of Reliance Jio Infocomm
APRIL 2013

• Signs a deal with RCcom to use its inter-city fibre-optic network for a one-time payment of Rs 1,200 crore
• Signs a deal with Bharti Airtel for exclusive right to use its 3,100-km submarine cable i2i connecting Chennai and Singapore

JUNE 2013

• Inks pact with RCom to rent its towers across the country for Rs 12,000 crore (deal involves Reliance Jio utilising 45,000 of RCom’s 50,000 towers)

DECEMBER 2013

• Signs agreement with Bharti Airtel to share telecom infra created by both parties. Besides sharing tower infra of Bharti Infratel and Indus Towers, both will use each other’s optic fibre networks

With this arrangement, Reliance Jio and Bharti Airtel will have cellular networks across all the 22 circles in India, through roaming arrangements and possible spectrum trading, if required. While Bharti Airtel subscribers will be able to access 4G services in all 22 circles, Reliance Jio users could access other network bands like 2G and 3G as well.

This is not the first time the two companies have agreed to share infrastructure. In April, they had signed an agreement that gave Reliance Jio an exclusive right to use Bharti’s 3,100-km submarine cable i2i connecting Chennai and Singapore.

Analysts believe the deal will be beneficial for both companies. Investment in setting up new infra will be lowered.

While Reliance’s fibre-optic network will be useful for Bharti Airtel, the latter’s massive tower network will benefit the former. Especially in circles like Delhi, Reliance will need many towers, as it plans to provide services through broadband wireless access (BWA) spectrum.

“This is definitely a positive for Bharti Airtel, as utilisation of existing resources will go up, and revenue from tower assets is also expected to have a positive impact,” said Angel Broking’s Ankita Somani.

The latest deal gives Reliance Jio, which also has a deal with Anil Ambani-controlled Reliance Communications (RCom) for sharing of 45,000 towers across the country, access to massive tower infrastructure of Bharti Infratel and Indus Towers.

With 35,376 towers in 11 telecom circles, Bharti Infratel, a subsidiary of Bharti Enterprises, is one of the largest tower infra providers in India. Bharti Infratel holds a 42 per cent equity stake in Indus Towes, which has 112,144 towers in 15 telecom circles.

However, SMC Global Chief Strategist Jagannadham Thunuguntla doesn’t want to read too much into the deal “It looks like usual business. Reliance has been making many announcements but not talking about launch,” he says.

Bharti’s national long-distance network provides pan-Indian reach with 175,705 route km (rkm) of fibre-optic network. Its global network runs across 225,000 rkm, covering 50 countries and five continents. Reliance Jio, on the other hand, holds a universal service licence and is the only pan-Indian operator with broadband wireless access (BWA) spectrum, capable of offering fourth-generation (4G) LTE services, across 22 circles.

 

Reliance Jio is setting up a pan India telecom infrastructure to provide high speed internet and communication services. This infrastructure will also be an enabler for a portfolio of rich multi-media digital services including  education, health-care, entertainment, payment and cloud services for millions of individuals, homes and businesses across India.

 

Reliance Jio is part of the “Bay Of Bengal Gateway” Cable System, planned to provide connectivity between South East Asia, South Asia and the Middle East, and also to Europe, Africa and to the Far East Asia through interconnections with other existing and newly built cable systems landing in India, the Middle East and the Far East Asia.