Etisalat, Reliance Strike Mega Network Share Deal
The companies claim it's the largest agreement of its kind in the country.
Etisalat DB, an Indian joint venture in which Etisalat holds a 49 percent stake, will use Reliance's towers and transmission infrastructure to roll out its new mobile network. Etisalat DB has licenses in 15 of India's 22 circles (service areas). (See A Guide to India's Telecom Market.)
For Reliance, the 10-year deal is worth $2.2 billion, according to the joint press release issued today.
In the world's fastest growing mobile market, new entrants are looking to speed network deployments and cut costs. And one way to achieve both is to use another operator's infrastructure, such as cell site towers. (See India Extends Network Sharing Rules, Indian Operators in Sharing Mood, and IndiaWatch: Towering Investments.)
India added 11.6 million wireless subscribers in the month of May, bringing the total to just more than 415 million, according to the Telecom Regulatory Authority of India (TRAI) . In April, 11.9 million subscribers were added in the country.
Etisalat DB (which was formerly known as Swan Telecom), is one of six new entrants in India's telecom market that are looking to profit from the surge in mobile growth in the country. (See Telecom Market Spotlight: Middle East, Swan Telecom Renamed, and Swan Buys Some Reach.)
The deal with Reliance may be the largest such sharing arrangement, but it's not the first. Norway's Telenor Group (Nasdaq: TELN) was the latest operator to announce a tower sharing deal earlier this year for its Indian startup, Unitech Wireless. (See Unitech Shares Towers and Telenor Takes Mobile Stake in India.)
— Michelle Donegan, European Editor, Unstrung