Reliance Jio Breathes Life Into 4G Plan: Tower Sharing Deal With BSNL

Reliance Jio Breathes Life Into 4G Plan: Tower Sharing Deal With BSNL

Reliance Jio Infocomm or RJIL is working overtime to successfully launch the 4G service in India. It has signed a deal with state owned Bharat Sanchar Nigam Limited or BSNL for leasing approximately 4,000 towers. According to the deal, BSNL will be offered a base rate of Rs. 38,000 per month for GBT or ground based towers. For rooftop based towers, the base rate has been pegged at Rs. 24,900 per month.

The state-run corporation will also provide discounted rates if RJIL consents to leasing at least 1,500 towers within the first year. "The rent for ground towers will be Rs 35,000 per month and Rs 21,000 per month for rooftop towers if Reliance Jio commits leasing of 1,500 towers in first year," BSNL Director (Consumer Mobility) Anupam Shrivastava has been quoted by PTI as saying. He further added that there will also be a 5% discount for commitment to lease at least 1,000 towers within 3 months.

Reliance Jio Infocomm has also come up with pacts such as these with leading telecom companies such as Bharti Airtel, R Comm, Viom Networks, Ascend Telecom Infrastructure and American Tower Company. Rather than creating infrastructure, RJIL's game-plan is to utilise existing infrastructure for setting up its 4G network.

Given the mutual benefit that will be derived between RJIL and its partners through such deals, the infrastructure sharing agreement has a positive implication in terms of generating revenue and partnerships. RJIL is the first telecom operator in the nation which has attained unified licence for 22 service areas in the country.

BSNL has also been actively hiving off towers. The plan to hive towers to separate subsidiary commenced in April this year. After an in-principle nod from the government in February this year, the state-run corporation has been on the move. It had also been given cabinet approval for surrendering BWA spectrum in 6 of 20 circles for a refund of nearly 6,700 crore at the start of 2014.

With the aim of improving its current financial condition, BSNL has been proactive since the start of this year. Having posted considerable losses in FY14, the state run telco needs to be alert about more revenue generating opportunities through its existing infrastructure.

RIL has also taken active part in a consortium set up to lay submarine cable system through the Bay of Bengal last year. Reliance Industries CEO and chairman Mukesh Ambani has also indicated data services will be launched by RIL in a phased manner as well.

High speed internet will be rolled out by RIL which also set up 8 free Wi-Fi spots in Ahmedabad and 9 at Baroda and Surat. With new targets in sight, RJIL's 4G network will be operational in cities and villages across the country. This will boost connectivity and create growth as well.