As indicated by Reliance Industries chairman Mukesh Ambani on Monday, Bharti Airtel and Reliance Jio, the 4G LTE venture of RIL, announced telecom infrastructure sharing deal.
As per the announcement on Tuesday, both telecom operators will utilize each other’s infrastructure including optic fibre, submarine cable networks, towers and internet broadband services.
This deal has far reaching significance as Reliance Jio Infocomm is yet to take off with its 4G services, but Mukesh Ambani does not want to give up. This is a win win situation for both corporate heads to save funds and effectively roll out cost effective mobile broadband across the country.
Sharing of infrastructure and services will mean that Reliance Jio Infocomm users can benefit from Airtel’s seamless services even if they are not covered by Reliance Jio Infocomm in a particular area in India. The Bharti Airtel statement does not say that it will go slow on its 4G expansion plans to accommodate Reliance 4G services.
The strategic agreement between Bharti Airtel and Reliance Jio Infocomm is aimed at avoiding duplication of infrastructure, preserving the environment and providing redundancy to improve quality of service.
Till now, the European telecom industry has seen this kind of deals among competing telecom operators.
“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,” the statement said.
Is Mukesh Ambani giving up?
To industry analysts, the deal signals the end of massive investments by Bharti Airtel and Reliance Jio Infocomm in their 4G ventures.
This also means that telecom equipment vendors such as Huawei, ZTE, Alcatel-Lucent, Ericsson, NSN, Cisco, Samsung, etc. may not wait for larger TD-LTE deals in India.
However, the association between two industry veterans – Sunil Mittal of Bharti Airtel and Mukesh Ambani of RIL – will trigger cost effective roll outs, emergence of new business models, cost effective packages to Indian mobile broadband users.
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