Reliance-Airtel deal may cut phone bills

New Delhi: In a move that could lower call and broadband charges, Mukesh Ambani's Reliance Jio and Sunil Mittal's Bharti Airtel have joined hands to use their telecom infrastructure, marking a complete shift from the situation a decade ago when the two were in warring camps. 
    Under the arrangement, announced a day after Ambani and Mittal hinted at a possible tie-up, Reliance Jio can access Bharti's countrywide tower and optic fibre network. This will help it launch various services faster. Reliance will pay to use Bharti's infrastructure, which would give the debt-laden Bharti much-needed cash. 
    Bharti, in turn, can ride Reliance's 4G network to offer roaming facilities to users. 
INFRA BOOST 
Reliance Jio can access Bharti's tower and optic fibre network. This will help it 
launch many services faster 
Bharti can ride on Reliance's pan-India 4G network (Bharti has 4G licences for only 8 circles) 
Infrastructure costs of both companies will drop due to sharing. This could push down tariffs Cloud over Mukesh's deal with RCOM 
New Delhi:Under their agreement, Bharti Airtel will be able to use the telecom infrastructure that Reliance Jio sets up and also ride its pan-India 4G services. Bharti has 4G permits for only eight circles. 
    However, the deal puts a question mark on Reliance Jio's inter-city optic fibre and tower-sharing deal with Anil Ambani's Reliance Communications (RCOM). A wider agreement between Bharti and Reliance Jio may prevent further cooperation between the Ambani brothers and restrict the potential benefits to RCOM, which was counting on the deal with Reliance Jio to bolster its bottomline. RCOM refused to comment. 
    In a joint statement on Tuesday, Bharti and Reliance said they would look at "other such opportunities" identified in the future. The arrangement could, in future, be extended to roaming on 2G, 3G and 4G, and "any other mutually benefiting areas relating to telecommunication, including but not limited to jointly laying optic fibre or other forms of infrastructure services". 
    "The cooperation is aimed at avoiding duplication of infrastructure, wherever possible, and to preserve capital and the environment. This will also provide redundancy in order to ensure seamless services to customers of the respective parties," the companies said. 
    Industry analysts said the move would be mutually beneficial for both Bharti — India's largest mobile operator which is saddled with a pile of debt due to its Africa buyout — as well as Reliance Jio, the new kid on the block which will get ready infrastructure to roll out services quickly. 
    "It is a win-win situation for both the companies as existing infrastructure gets better utilized. Reliance Jio does not need to spend money on recreating infrastructure as it can ride on Bharti's set-up. On the other hand, Bharti will get more cash inflow from its existing assets which will help them compete more freely in the market," said Prashant Singhal, who tracks the telecom sector at Ernst & Young India. 
    A telecom industry veteran, speaking on condition of anonymity, said the agreement has the potential to disrupt the current market dynamics and could make things difficult for other telecom players. "Some analysts said the lower operating costs may even prompt Mukesh to offer dirt-cheap tariffs on broadband. 
    So what is on offer through the new agreement? Bharti has about 85,000 towers spread across the country, including its proportionate share in Indus Towers — a JV between Bharti, Vodafone and Idea. Bharti also has a pan-India optic fibre cable network of 1.75 lakh route km and a global network that runs across 2.25 lakh route km, covering 50 countries across five continents. 
    This includes ownership of i2i submarine cable system connecting Chennai to Singapore. 
    Reliance Jio holds a Unified Licence and is the only pan-India operator with Broadband Wireless Access (BWA) spectrum capable of offering the high-speed 4G LTE wireless services. It is also setting up a pan-India telecom infrastructure to provide high speed internet and communication services.