RJIL – Airtel Deal: Rivals join forces in Pursuit of Common Interests

Sunil Mittal led Bharti Airtel and Mukesh Ambani’s Reliance Jio Infocommare joining forces in a ground-breaking telecom infrastructure sharing deal. The agreement includes fiber optic network, both inter and intra city, submarine cable networks, mobile towers, along with broadband internet and other opportunities in the future.

As of October 2013, there are a total of 875.48 million mobile subscribers in India. This number continues to grow. 3G in India has been quite successful. Now, 4G is expected to see a launch soon. Reliance Jio Infocomm (RJIL) has received a pan-India 4G license and has been issued 2.2 crore mobile numbers. RJIL has been pursuing the infrastructure and related projects with a lot of vigor and this infrastructure sharing deal with Airtel is according to analysts, ushering a new era of telecom growth in the country. While this story has been big news, many people are pleased to see Mukesh Ambani and Sunil Mittal come together. Talking at the Progressive Punjab Summit in Mohali recently, Ambani, the Chairman of Reliance Industries Limited (RIL) commented, “For further enhancing the digital experience, we can have a collaborative partnership with our friend Mr. Mittal.”

Both companies have reasons to benefit from the deal. The primary purpose is to avoid duplication of infrastructure projects. The side benefit is the fact that less land will be occupied and as a result there will be a lot of cost-saving for both companies. This deal will ensure availability of 4G network to users from both telecom majors. Also, there is speculation that this could be extended to accommodate 2G and 3G networks in the near future. This is fantastic news for RJIL who will now have access to Airtel’s 4G LTE network. Expecting to see a launch sometime in 2014, Reliance Jio Infocomm will make a grand entrance into the telecom space.

While Airtel has already begun rolling out 4G services and RJIL is on the verge of starting them soon, the growing mobile users in India have enough reasons to cheer. First, the availability of 4G could mean faster speeds and increased access to mobile networks for many people. RJIL, for example, launched 4G is Odisha on a trial run. A side benefit according to many analysts is that 3G and 2G services could get a lot cheaper. Overall, the deal signals fresh optimism in the sector and is a sign of things to come. With increasing infrastructure costs and environmentalists questioning practices by large firms, such collaborations could set the tone for the years to come. For the time being at least, it seems that this alliance between two of India’s most successful companies could be mutually beneficial and crucially, the consumer could also expect to benefit.

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