The agreement between Bharti Airtel and Reliance Jio Infocomm has brought to focus the importance of sharing infrastructure in a capital intensive sector such as telecommunications.

Until now the sharing of infrastructure among telecom companies has been limited to mobile towers, which has brought great dividends to the cellular operators in their efforts to offer affordable services.

Take the case of Indus Towers which has become the world’s largest tower company with 1.1 lakh sites. This joint venture between Vodafone India, Idea Cellular and Bharti Airtel has helped the three mobile operators to share costs and resources to get pan-India coverage and at the same time compete with each other in the market in offering services to consumers.

Reliance, Airtel deal good for sector

The deal between Airtel and Reliance augurs well for the sector because data intensive applications like video telephony and tele-medicine is set to explode in the coming years for which mobile networks alone, running on bandwidth constrained airwaves, will not suffice.

Having a robust optical fibre backbone with unlimited capacity is critical to make bandwidth-guzzling but yet socially critical data services such as mobile healthcare, m-education and m- banking available to the masses. Sharing will enable telecom companies to spend time and energy more on enabling these services than on dealing with local panchayats and municipalities for right of way for laying cables or finding rooftops to install the next tower.

Thanks to a forward looking policy announced by the Government in 2008, mobile companies were allowed to share passive infrastructure including antenna, feeder cable, radio access network and transmission systems. Until 2007, mobile networks had covered only 60 per cent of the population and 40 per cent of geographical area.

By 2013 there is near 100 per cent coverage on both parameters as operators were able to ride on each other’s network to get faster footprint. And it’s not as if sharing has stopped infrastructure creation. From 1.35 lakh towers in 2007, now there are over 3.5 lakh towers.

Past lessons, future policies

The Government should take lessons from its own policies and do three more things going forward. First, it must allow spectrum sharing fully . Under the National Telecom Policy 2012, Government has proposed to allow spectrum sharing but only among operators who already own some airwaves. That’s a convoluted way of allowing sharing because if an operator already has spectrum there is no reason why it should take from another. Sharing becomes meaningful, like in the case of the Reliance-Airtel deal, when an operator who does not have the resources is allowed to access it from another player who has it.

The second thing which the Government must do is to legalise Mobile Virtual Network Operators (MVNO). This will enable even non-telecom companies with strong retail presence to become a service provider by leasing network capacity from telecom companies. By permitting unrestricted spectrum sharing and allowing MVNO, the Government would also find a solution to the controversy around 3G intra circle roaming agreements.

The third thing which the Government must do is to find a way to pool in all the optical fibre cable systems owned by various players. State-run Bharat Sanchar Nigam Ltd has over 6 lakh kilometre of optical fibre laid under the ground, RailTel has 42,000 route kilometre of cable, PowerGrid has 25,000 km and private players such as Bharti Airtel has 1.6 lakh kilometre of inter-city cable network. While the proposed National Optical Fibre Network, which aims to provide broadband connectivity to 2.5 lakh village panchayats, is a step in the right direction, private players should also be asked to be stakeholders in the project.

The final objective for the policy makers should be to encourage competition by allowing service providers to ride on already established infrastructure rather than having to indulge in wasteful creation of parallel networks.