Is it going to mark a new era in infra sharing in India? Perhaps, yes! The decision to roll-out 3G services jointly by Aircel & Tata has been announced to LightReading research yesterday, but details are yet awaited.
As per the report, Aircel & Tata has agreed to rollout 3G in circles, where they both possess 3G licenses, namely in Kerala, Punjab & UP (E). Nokia Siemens Networks will be conducting the pilot project for both in the State of Punjab soon. NSN also holds 4 year managed service contract for Aircel for Punjab circle.
But why should we all be bothered about this 3G rollout tie-up? It’s in fact routine procedure to share passive infra as far as 2G is concerned.
First, this is first of all infra sharing deal in 3G space among two leading telcos in India. Second, in all 3 telecom circles Aircel’s 2G subscriber count is quite poor (Nov-2010). Though it couldn’t be confirm the same for Tata, it’s highly unlikely that Tata is in leading position in any of these 3 telecom circles. It’s certainly wise decision for Aircel as well as for Tata, to focus on OPEX & CAPEX saving, while rolling out 3G services in circles where it represent weak growth prospects or smaller 2G footprint. By sharing infra for 3G, both can focus more on other circles of importance for them, e.g. Maharashtra for Tata or Tamilnadu for Aircel. In fact if you look at ARPU figs, for Aircel, for both Punjab & UP (E), it’s just touching Rs 50 ( Jun-10), which signifies the infra sharing deal for 3G.
And when ARPU’s are falling flat for over year or so, while profit margins are dwindling, it’s not something we shouldn’t be expecting. In fact, as the time passes, infra sharing, both active as well as passive will become norm in 3G and 4G network rollouts. It will be imperative for operators in coming decade.