With Jio launching unparalleled 4G VoLTE Network, incumbents will have to tread a careful path to survive. Idea Cellular has already said it is considering active infra-sharing [Spectrum Sharing by means of Trading] possibilities. This could be game changing and may lead to incumbent telcos accelerating fibre deployments.
Idea Cellular in the last one month has talked extensively about active infrastructure sharing and the company has stated that it is negotiating with a potential partner on the commercial terms. The company mentioned active infra sharing as a potential capex/opex saving opportunity for not just 4G, but also for 2G and 3G. We think it is imperative for operators to engage in active infra sharing given its potential to reduce both capex and opex. As was the case with passive infra sharing, we believe operators will start viewing equipment on towers as less strategic going forward. RAN sharing is likely to hurt rental growth for Bharti Infratel, in our view.
The Big launch of Jio may prompt other incumbent telcos to invest in Wired FTTH broadband and content. The highly fragmented Indian cable TV sector may therefore begin to consolidate.
3G mobile broadband relevance falls over 5-6 years as incremental data subscribers opt for 4G services. We expect incumbent telcos to offer VoLTE gradually in urban markets.
