Airtel (bharti) And Reliance Communications To Share Infrastructure

[abhay 0]

Airtel, Rel Com to share infrastructure

The two largest telecom players, Reliance Communication and Bharti Airtel, are now joining hands to combat margin pressures. They are close to signing an infrastructure sharing agreement, which could add as much as 300 crore to their numbers.

To beat the margin pressure both the companies will share infrastructure like those cellular telecom towers that dot India's landscape.

Reliance and Airtel are likely to sign an infrastructure sharing agreement in the next one month.

Sharing pays

* Reliance Communications and Airtel to share cell sites across India

* Each cell site costs between Rs 30 lakh to Rs 35 lakh

* Around 2,000 cell sites can be shared by the two in the next two to three years

* Reliance Communications will have similar tie-ups with Hutch and Idea

"Bharti has the largest subscriber base with over 26 million and Reliance Communications has about 24 million, so the largest players are setting the trend and it is a trend that the other players will follow," said Amitabh Chakraborty, Head - PCG, Brics Securities.

Sharing cellsites will cut capex and operating costs by 10 per cent and it could add Rs 200 crore to Rs 300 crore to Airtel's and Reliance Communication's books each year from next year.

"If the expenditure reduce and margins improve it will reflect on the EPS and is a great news for share holders," Chakraborty added.

Tie-ups like the one between Reliance Communication and Bharti could change the telecom landscape of the country.

It will not only cut costs and cushion margins for the players, it will also ensure faster service roll out and help them achieve aggressive growth targets.

http://www.ndtvprofit.com/homepage/storybu...2010:39:27%20PM

hehehehe its true opposites attract !!! whats ur take on this one ??

[anujit 0]

Is it sharing CDMA & GSM space? Can they do that? Or is it GSM - GSM sharing?

[vmsanghrajka 0]

Its GSM-GSM sharing i guess.. Reliance is very "shaana" coz they dont have wide GSM reach.. they r sharing with bharti.. I think reliance will benifit more for this aggreement rather than bharti..

cheers!!

[@ksh@T 20]

what ever be the case its a final handshake between the two largest telecom players in INDIA... i am sure this will also between CDMA and GSM...

[shashank 8]

GSM or CDMA doesnt matter here.Because they only share the passive components like the tower and may be even power supply and NOT THE TRANSMITTERS and other such active componets.

[amtrag 20]

Right. They are not sharing the spectrum (to be precise)....only the passive infrastructure.

[linuxguy 0]

So reliance is going to see a very fast roll out i guess

[srini 1]

I feel this move will extensively help Reliance and partly for Airtel.

As Reliance wants to starts its GSM services in all parts of India, It could go with infrastructure sharing with Airtel whereever it is already presents.

Reliance is using its BTS shelter for its wireline services too in Top 29 cities. So already there is lot of space constraint in these shelters to accommodate new equipment.

So reliance may use Airtel towers in these top cities and can lease out its infrastructer in remote areas to Airtel.

[WALKER 0]

Move will be more benificitial for Reliance Info as they plan to roll out GSM services & by using Bharit's infrastructure for the same it will not only provide them with cost benifits but will give them a great jump in rolling out thier GSM services.

[linuxguy 0]

when is the question. i am eagerly waiting to ditch all gsm operators!

[Nirvana 4]

This was a project brought up by Dayanidhi Maran some time ago, urging providers to share. In this cut throat competition market, it becomes necessary for providers to do something like this.

[shashank 8]

This actually is an old procedure, because Tata is already using Airtel, Hutch and Idea's infrastructure!

[petar 15]

@shashank.

Agreed its old procedure. But what makes this news special is... its a handshake between 2 Largest companies considered greatest Rivals. This kind of moves helps companies to reduce cost & consumers get better coverage.

Besides Reliance had a practice of raising its own Towers/Cell sites.

[abhay 0]

Reliance, Hutch & Idea to share cell site infrastructure

Anil Ambani-controlled Reliance Communications has entered into an agreement with GSM service providers Hutchison-Essar and the Aditya Birla-controlled Idea Cellular to share passive infrastructure for cell sites.

The agreement will help the company in faster rollout and would result in significant cost reduction.

The agreements were signed between RCL and Hutch last evening and the deal with Idea Cellular was inked this morning, a Reliance spokesperson told PTI here.

"A model guideline for infrastructure sharing has been worked out... which incorporates the areas of co-operation between RCL-Hutch and RCL-IDEA Cellular," the company official said.

Under this model, the sharing of costs for existing as well as future passive infrastructure has been factored in, he said.

Under the agreement, both companies will have access to each others' cell sites across the country.

A Hutch spokesperson however did not comment on the issue.

http://economictimes.indiatimes.com/articleshow/2207568.cms

[FEVIN-RAJ 61]

idea and hutch hav poor coverage than RCL

sharing the infrastructure will definitly benefit hutch and idea ....

ofcorse RCL will get return the their invested money ....

[vmsanghrajka 0]

idea and hutch hav poor coverage than RCL

sharing the infrastructure will definitly benefit hutch and idea ....

ofcorse RCL will get return the their invested money ....

I agree 100%!! Hutch network is WORST.. I m using 2 cellphones viz. hutch n reliance.. hutch network's call drop rates, network failure rates in mumbai circle is very high compared to reliance...

CHeers!

[hritik123 4]

true hutch has very poor network

[linuxguy 0]

Hutch has a decent network. I am a Hutch user and I am pretty satisfied with it. Its best amongst the GSM players atleast.

[abhay 0]

Reliance Comm to sign agreements with Airtel, Spice Telecom, Aircel

Reliance Communications is likely to sign infrastructure sharing agreements with Airtel, Spice Telecom and Aircel, reports Economic Times.

With the signing of these agreements, Reliance will be able to install its electronic infrastructure at over 50,000 cell sites across the country under this sharing model.

The Anil Ambani-owned company had recently signed similar agreements with Hutch and Idea Cellular that give it access to over 22,000 cell sites of the two companies. All the five companies will also be able to access RCVL`s infrastructure across the 23 telecom circles of the country.

Cell sites are the physical structures on which all electrical equipment and switches are placed. Up to four operators (irrespective of the technological platform (GSM or CDMA) can jointly share a single cell site, without any operational and radio frequency interference.

Besides, Reliance has also mapped out a two-branched strategy for infrastructure sharing. The first level will entail looking at the ongoing expansion plans and look at possibilities of using shared infrastructure and offering its own infrastructure to other operators.

The company has also completed deployment of the `soft switch` technology, the fundamental building block of next generation networks, in three out of eight GSM circles of its arm, Reliance Telecom. The remaining five circles of Reliance Telecom are also being covered in a phased manner. This technology leads to a convergence-like scenario between the GSM and CDMA networks.

http://www.sda-india.com/sda_india/psecom,...,13155,p,0.html

Edited October 30, 2006 by abhay

[jusmail 0]

I guess with this all the signings of MOUs must be over, and soon we could be hearing about GSM roll out, may be Dec 28th (Late daddy's birthday) ot January

[petar 15]

Reliance is in postition to Roll-out GSM services within one month of govt approvals which are likely to come in thier favor prety soon.

Dec 28 ..hmm maybe. With Indian Govt & Reliance ..you can never be too sure.

[Arun 795]

Reliance Communication to Hive Off Key Infrastructure

Business Standard

Thursday, November 02, 2006

American Towers Inc may be strategic partner.

Reliance Communications plans to hive off its cellphone towers into a subsidiary and offload a significant stake to the $18-billion US company American Towers Inc, an independent owner and operator of wireless and communication sites.

Reliance Communications has 15,000 existing cell sites for CDMA and GSM services in India and is setting up another 10,000 in the next 12-14 months, taking the number to about 25,000.

The company’s board is learnt to have discussed this as part of a restructuring initiative. The idea was to hive off a crucial asset, normally a recurring cost on a telecom firm’s balance sheet, and convert it into a source of revenue, sources close to the development said.

Reliance Communications hopes to use the expertise of American Towers Inc, which owns and operates towers at 30,000 sites in the US, Mexico and Brazil, to offer them for use by other operators. A team from American Towers was in Mumbai recently to discuss the deal with RCL officials, sources added. The subsidiary`s cash flows will fund the setting up of towers and along with American Towers will be in charge of operation and maintenance.

The move is a step ahead in the current trend of private mobile phone operators sharing each others’ towers (co-location) in order to reduce costs and achieve better coverage.

The costs of setting up a tower vary. Ground-based towers cost up to Rs 1 crore, depending on the site and terrain, while rooftop towers can cost only Rs 50,000. There are also variable costs like rent, fuel for generators, air-conditioning and maintenance.

An official of a leading industry association pegs the average cost of a site at Rs 25 lakh, excluding the transmission and switching gear housed in a tower shelter, and Rs 35-40 lakh, including them.

According to sources close to the development, electronics will not be a part of the subsidiary. Assuming just the sunk costs, the new subsidiary will have a total capital expenditure of around Rs 875 crore. However, the valuation of the sites will be higher, given the variable costs and premium on locations. An internal estimate puts the valuation at around Rs 20,000 crore.

Infrastructure sharing is a key part of Reliance Communications’ plans to reduce capital expenditure and hasten its GSM rollout.

The company has already signed agreements for infrastructure sharing with Hutch, BPL and Spice and is also expected to sew up similar agreements with Bharti Airtel and Aircel.