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Airtel saved “several hundreds of crores” through fiber sharing: MD & CEO (India) Gopal Vittal

DoT’s directive which allow telcos and ISPs to share active network infrastructure (BTS boxes, fiber, feeder cables, etc) seems to have helped boost Airtel’s fiber broadband reach. During a recent analyst call, the company’s MD & CEO (India) Gopal Vittal said that the new DoT policy allowed it to come up with multiple fiber sharing arrangements with “most” of its competitors.

Prior to this DoT policy, which came out in February last year, service providers were allowed to share only passive infrastructure (towers). “We have over the last 18 months done extensive amount of fiber sharing… I believe there is no point in digging streets all over again. So where there is already laid fiber, we swap and we do it on both sides and that has helped us a lot and we saved several hundreds of Crores because of this,” Vittal said.

Passive infrastructure sharing also allow service providers to use their own spectrum, but run this on equipment from other telcos/ISPs. Vittal added that Airtel has already been doing this in tie-ups with its competitors and that the company plans to use such arrangement in rural areas . “That (passive infra sharing with own spectrum) is something that we are trying with a couple of competitors and trying out, piloting it and if that works in rural areas and small towns we may extend that more during the course of this year.”

Note that apart from active infra sharing, telecom companies now have a range of incentives like new Right of Way policies, mandatory infra sharing in residential buildings, and the chance to generate additional revenue via MVNOs. This might help fix broadband in India, which currently dominated by state owned telcos like BSNL and MTNL in terms of subscriber base.

Airtel’s investments in Fiber and 4G

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Airtel is now staking more money into its fiber broadband business to keep up with completion in the fiber segment. The company claims that it now has 2 million home passes—a metric used to determine total number of homes that can be connected to an operator’s network infrastructure. This number used to be around 1 to 1.2 million homes two years ago, Vittal said.

Speaking on the 4G segment, Vittal pointed out that the company has not been “seeing any significant congestion on 4G sites, the capacity utilization is still very low and as we speak we are rolling out more and more 4G sites; so the answer I would say to you is that in the next coming 12 months a very substantial part of our CapEx will only be towards fiber and 4G.”

On Competition

As per latest TRAI data, the largest wired broadband operator is BSNL with 9.98 million connections. Airtel had only 2.08 million connections, while its competitor YOU broadband which was acquired Vodafone has 0.62 million connections. MTNL has 1.01 million connections. Apart from this, Jio is also expected to come out with its own set of fiber-to-home service. The Indian government had set aside Rs 10,000 crore from the 2017-18 budget for deploying high-speed fiber connectivity at villages under BharatNet project.

Note that in terms of wireless broadband, Jio has 4G operations in all 22 circles, while Airtel has 4G operations in 21 circles. However, Airtel has taken a stance on whether to compete using capacity (bandwidth, cables, and spectrum) or purely on the basis of demand. “So in a way we are chasing capacity but we are going to be ahead of that demand, so supply will always be ahead of demand. It is not going to be so far ahead that we are going to put in three years of investment just because we want to match the same amount of capacity that is actually running on another network, which is essentially providing data services for free,” Vittal added.

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