Vodafone Idea and BSNL Infra Sharing Could Lead to Massive Cost Savings

Vodafone Idea Limited (VIL), and Bharat Sanchar Nigam Limited (BSNL) are two major, but struggling telecom operators in India. They are trying to grow their business by scaling infrastructure, but it is not affordable at all. To build out and end-to-end telecom infrastructure which includes fiber backhaul, towers, and spectrum usage.

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A few days back, there was a report claiming that Vodafone Idea and BSNL are exploring an infrastructure sharing deal. That would mean less duplicate spending and a faster rollout, given that the operators have limited cash.

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Vodafone Idea has been trying to raise money via debt to improve coverage and modernise infrastructure. This would allow Vodafone Idea to add new users. BSNL is also trying to roll out a fresh 4G infrastructure across India, and it has already started with over 1 lakh 4G sites.

If the telcos come on the same page about sharing infrastructure, that would mean massive cost savings for them. Along with that, it would give them an edge in the market, and allow for a faster network rollout across the country. The telcos want to now expand the coverage in rural areas along with the urban towns. But the ROI (return on investment) for pouring money to build out the rural telecom infrastructure is not attractive at all for the telcos.

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