Three Indian Wireless companies have concluded that owning and operating layer one infrastructure is not essential for retail operations.
Bharti Infratel Ltd., a unit of Bharti Airtel Ltd., is merging its telecom tower business with Vodafone Essar Ltd. and Idea Cellular Ltd.
The three companies will form an independent tower company called Indus Towers Ltd. that will provide passive infrastructure services in India. Bharti and Vodafone Essar will hold 42 percent each of the company, and Idea will own the remaining 16 percent.
Passive infrastructure services include towers, shelters, cooling systems, power supply and other items that enable telecom systems to work.
The new firm will merge the passive infrastructure assets of the three companies across 16 telecom territories in India and will initially have about 70,000 telecom sites, the statement said.
The move parallels "structural separation" (creation of a legally distinct and separate wholesale facilities company) more than "functional separation" (creation of an owned wholesale facilities company). Still, the move is interesting given the move to functional separation in Europe, where wholesale facilities are run by one entity, and all retail providers lease capacity and features to run their retail operations.
The move by the three wireless service providers mirrors a broader change in the global communications business from a completely vertically-integrated model to a partially horizontally-integrated model. Basically, communications networks increasingly operate the way data networks do, with applications running on top of facilities that are owned by many different entities in the value chain.
You might call this a move to more "open" networks, and indeed that is precisely what is happening, in small steps.
