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Both telcos are keen to cut the cost of their fibre rollouts as they look to compete with India’s disruptive operator, Reliance Jio, in the fixed line sector
Indian telecoms giants Bharti Airtel and Vodafone Idea are in talks to combine their fixed line fibre broadband infrastructure by launching a new Joint Venture on the sub-continent. The pair have a similar arrangement to govern their towers operations, which are now co-owned through a JV.
“We have made an invitation. We did that in towers — if you remember, Indus Towers was created. And on the same lines, we have asked Vodafone Idea to come and join the fibre company,” Bharti Airtel chairman Sunil Mittal told The Economic Times of India at MWC 2019.
“It will be a two-party JV. We are starting with our own fibre company and if Vodafone Idea brings its fibre assets, then they will get appropriate shares,” Mittal added.
India’s telecoms sector remains one of the most competitive in the world, with operators trading on wafer thin margins. The JV would allow both companies to make considerable savings and leverage enormous economies of scale, as they look to rollout a competitive fibre to the home (FTTH) offering. India’s disruptive operator, Reliance Jio, has already rolled out its ultra-low0cost GigaFiber product, which looks set to kick off a price war in India’s fixed line sector.
“They have a lot of fibre, we have a lot of fibre. But when you combine fibre, it does two things — you get a lot, though we have a lot of overlaps. But both will gain about 25% capacity, and new routes, which we don’t have,” Mittal said. “But importantly, the future build of all fibre starts getting common, so you stop wasting money.”
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