MUMBAI: Reliance Jio Infocomm is in talks to lease more signal emitting sites, or base stations (BTS), from tower companies such as Indus Towers and American Tower Corp. to plug gaps in its urban networks, which have emerged as key to year-end launch plans.
Three people familiar with development said the actual number of sites, which seems to be a moving target, has been quoted at its lowest for 35,000 tower tenancies.
One of the people said that Mukesh Ambani-owned Jio requires at least 15,000 of these additional sites immediately if there is to be a service launch in major cities by October. The company is focused on a city-centric outlay initially because after several studies it has found that its best opportunity to find Internet users isn’t in rural India, one of the people said. The remaining tenancies are being sought until December when the company now hopes to launch commercial services.
Jio has approached the country’s two largest tower companies Indus Towers and American Tower Corp. (ATC) with a figure of around 35,000 tenancies along with a hard press to get discounts.
However, ATC, which runs around 56,000 towers, and market leader Indus, which owns nearly 1,20,000 towers, are so far not biting the bait as they realise Jio does not have time to build for itself. “One can only hope better sense prevails because neither the time nor financials work for a private build out,” said one of the three people quoted earlier.
Another said that Jio had sought out some 60,000 towers at 60% discount, which tower operators simply couldn’t do without ruining the market for themselves. “It is a clients job to push and ours to push back to the point that it makes sense.”
A fourth person said that while Jio is negotiating for so many tenancies, given the layout of telecom towers in the country, a larger discount doesn’t amount to all tenancies going to a single tower company.
“If you look at the network plan, if they need a site that ATC has, then Indus can’t take that or vice versa, because at that spot there is only one tower,” he said. Therefore, the tenancies each operator will get will be unchanged based on discount.
The latest set of tower requirements is for more robust casting of airwaves in the 800 MHz band, that the company bought in the 2015 spectrum auctions. The band with its longer range and higher penetration of concrete buildings is deemed to be the foundation of the rejigged network plan.
In a recent report, Bank of America-Merrill Lynch said it expects Jio to set up an additional 25,000-35,000 cell-sites as it looks to improve its coverage, especially with a December full-scale commercial launch in mind.
Most of these sites will be leased from independent tower companies such as Indus, Bharti Infratel and ATC, given that “time to market” advantage is critical for Jio, BoFA-ML said. The companies though aren’t expected to offer discounts – RCOM had offered around 50% discount to Jio – to use their towers as then they would have to give discounts to its top three customers as well.
ATC declined to comment, while Indus said it would pursue all opportunities to get clients as long as it could maintain parity among them all. Jio didn’t respond to emailed questions at the time of going to press.
In the lead up to the much-delayed launch, Jio has already leased sites from tower firms such as Indus, Bharti Infratel, Viom Networks, ATC, and Reliance Infratel, Reliance Communications’ telecom tower arm, which incidentally is on the block. ATC has recently bought a majority stake in Viom.
Conceived in 2010, Jio has been planning a 4G service launch in India for six years now, and has built infrastructure at a whopping Rs 1,50,000 crore for it. However, at every stage near launch, it has found it needed incremental additions to differentiate it from competition. A key to that was use of optic fibre to connect towers, which would increase the capacity of each one significantly. Yet, having been unable to get viable right of way, Jio is now opting for a wireless backhaul unlike earlier plans.
In preparation for the launch, sister concern Reliance Retail has already launched Lyf branded handsets, which have so far seen tepid uptake, industry sources say. The company has maintained it is collating experiential data from these customers and plugging gaps that they have found.