Trade

Major Telecom Companies to Unite as a Team for Joint Optical Fiber Venture to Counter Reliance Jio

Major Telecom companies of India, Bharti Airtel and Vodafone Idea will work together as a team to create optical fiber venture similar to the model of Indus Towers. This plan has been developed so as to take over their rival company Reliance Jio which is a flagship of Reliance Industries headed by Mukesh Ambani.

Reliance Jio Telecom Company that was launched two years ago has set high completion for Airtel and Vodafone-Idea. They are most likely to team up on optical fiber space that is going to be the key factor for future network expansion.

Sunil Mittal, the Chairman of Airtel on Tuesday informed that he has called Vodafone-Idea to team up with his fiber Company Telesonic and can unite their assets together. Quite a friendly reply was given by Vodafone-Idea to Airtel Chairman Sunil Mittal. He also said that the deal would eventually help Airtel to save costs by further reducing on duplication and at the same time help grow their fiber network.

Both the telecom companies have acquired a telecom tower company, Indus Tower. The Tower was incorporated in November 2007. Indus Tower is the front runner of a joint venture between Vodafone Idea and Bharti Infratel. The tower allows providing infrastructural services to telecom service carriers.

While responding at Mobile World Congress, Mittal mentioned that the partnership will be a joint venture. We are getting started with our own fiber company, and if Vodafone-Idea is able to get its assets, then they will be offered proper shares.

This move is taken at a time when the Vodafone-Idea CEO, Nick Reads stated that, Telecommunication companies should work together and share their network that will help for managing cost successfully and also helps to provide better coverage to customers.

When Mittal was asked if he will offer the same invitation to Reliance Jio? He replied, according to my view it is much better. He further said that at first let the deal between Vodafone-Idea be finalized and then we will see over it. The partnership between the two will be the first ever rival joining of companies to block Jio’s high-level challenge in the telecom industry. Airtel is also ready to partner with other companies like Amazon and Flipkart. However, he said that the company’s involvement in the 5G auction process is not possible because the reserve prices are too high and there is no way to buy them as of now. Mittal further mentioned that the government should lend support to telecom companies or else the companies may incur heavy losses and large debts and may fall down just like the aviation industry. However, the companies can still survive through tough times and may receive benefits in the long run.

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