Bharti Airtel has expressed a willingness to set up a joint venture with Vodafone Idea that would own and operate the two firms’ pooled fibre assets.
The Economic Times quoted an Airtel spokesperson as saying: “We will be delighted to share and create one company. We have already built a lot of fibre with Vodafone Idea and over the past two years a lot of sharing has happened between the two companies.”
A clear precedent for a joint venture exists in the form of Indus Towers, a dedicated tower firm which owns 124,000 towers in India and was founded by Airtel along with Vodafone India and Idea Cellular prior to their merger.
Under a similar arrangement to Indus Towers, the operators would retain the right to sell off parts of any new company in order to generate cash. The two market leaders both saw significant falls in revenue and profitability in the quarter ending 30th September – a long term corollary of the price war kicked off by Reliance Jio offering heavily discounted services when it entered the market in 2016.
Both are currently saddled with huge debt burdens and are desperate to find ways of paying these down. To that end, Vodafone Idea created a new unit to manage its fibre assets with the goal of selling it to bring in funding.
Airtel meanwhile has signed an agreement to fold its tower unit, Bharti Infratel, into Indus Towers. It is also looking to bring in up to $1.5 billion through the sale of a stake in its African business.