India’s telecom regulator has released proposals allowing companies to share infrastructure such as mobile phone towers in a move that would help relieve telecom operators of heavy costs and speed their expansion into the country’s rural areas.
Expanding phone service outside of Indian cities is critical to sustaining the blistering growth of the world’s fastest-growing mobile market.
The Telecom Regulatory Authority of India (Trai) on Wednesday said it has submitted recommendations for an infrastructure sharing policy to India’s Department of Telecommunications, which must give final approval.
Splitting the high costs of setting up and maintaining towers and equipment between several companies would help ease financial strain. Vodafone of the UK cited the potential cost-savings and ‘synergies’ of infrastructure sharing to help justify the $11bn price tag it paid for control of Hutchison Essar.
Bharti Airtel and Reliance Communications, the country’s two largest mobile phone operators, both expect to spend $2.5bn each on capital expenditure. Both have also moved to spin off their towers business into separate subsidiaries to help finance infrastructure and remove costs from the core group.
Trai estimates India will require about 330,000 towers by 2010, more than triple the current count of 100,000. Infrastructure sharing is crucial for faster roll-out of base tower stations that transmit mobile phone signals across India’s vast interior, much of which is difficult to access because of poor roads and lack of electricity.
“Apart from huge investments needed, the time taken in roll-out could be a major bottleneck” in meeting government targets of 500m total phone subscribers by 2010, said Trai.
The regulator has proposed not only “passive” infrastructure sharing of physical space and tower equipment, but also more sensitive “active” infrastructure, which includes operations such as transmission systems and antennas.
Trai has recommended that companies use their website to announce existing and future infrastructure available for sharing with others. It also recommended the need for immediate identification of critical infrastructure sites.