In a major strategic move that would redefine the Indian telecommunication market, the Chairman of Bharti Airtel has invited Vodafone Idea to set up a joint fiber optic company to deploy and manage fiber networks in the country.
It is estimated that a joint fiber company and common network inventory can save both companies a substantial 25 percent fiber builds. Such savings come from the maximization of the network usage, reduction of maintenance and operations cost apart from management and administrative costs. The future fiber builds would be common for both Airel and Vodafone in India, once the proposal gets a final shape.
Bharti Airtel is setting up a company to deploy, manage and maintain fiber optic networks in India. The card has shown from Ariel’s side, which is a rare gesture in the Indian telecommunication market. Airtel, which is keen to make rival Vodafone Idea a partner in the independent optical fiber company it is setting up, has invited the latter to be a part of the new firm. If Vodafone Idea decides to join, this would be the single largest independent fiber company in the country.
Bharti Aitel Chairman, Mr. Sunil Mttal told media persons that his company has always been in talks with Vodafone. Now, Bharti had decided to demerge and filed an application for demerger of fiber unit to the telecommunication regulatory authority of India.
By the end of March 2019, it is expected to form a separate fiber company. It was in this context that Mr. Mittal invited Vodafone to join with his new fiber company.
While the initial response from Vodafone was “warm”, the plan is to set up an independent tower firm on the lines of Indus Towers for shared infrastructure.
Airtel had this plan since 2017 when it stated its plans to transfer its optical fiber business to a wholly-owned subsidiary – Telesonic Networks. If Vodafone “accepts the invitation” the structure will be altered along the lines of Indus Towers, he added.
Vodafone is building its own fiber optic network in India, wherever it got a license to operate and Airtel one of the bigger players in India owns a substantial asset of fiber optic networks.
Airtel’s fiber optic networks span more than 130,000 kilometers in India. If Vodafone and Airtel combine both the companies will gain about 25 percent capacity on routes that they do not have individually. This combined with the common fiber build in the future means big savings for both operators.
A joint company for fiber build will speed up the deployment of fiber optic networks in India. India has more than 18 fiber optic cable manufacturers. Some of the largest fiber optic cable manufacturers are Sterlite, HFCL, Birla Ericsson/Vindhya Telelinks, Finolex Cables, Apar Industries.
Indian fiber optic cable makers consume around 30 million fiber kilometers currently, which is predicted to touch 50 million by 2023. In order to tap into the potential fiber business, HFCL had started the production of optical fibers in India. Other optical fiber manufacturers in India are Corning, Sterlite, Birla-Furukawa, Finolex, and Aksh.