Bharti Airtel pulls out of Alcatel JV to form fixed entity
India’s Bharti Airtel has reportedly decided to terminate its broadband management joint venture with Alcatel-Lucent in order to create a new fixed-line entity with its rival mobile operators.
The new entity would manage fixed-line and fibre optic assets in a similar manner to tower infrastructure firm Indus Towers, according to India’s Economic Times. Bharti combined its towers with Vodafone India and Idea Cellular to form Indus Towers in 2008.
An executive told the publication that Bharti planned to approach Vodafone and Idea at a later date to replicate the Indus model for fixed assets.
No financial details of the transaction with Alcatel were revealed. The two set up the JV in 2009 with Bharti saying it would pay approimxately $500 million over a five year period for the management of its landline and broadband businesses in 100 cities. The contract was due to end in 2014.
In contrast Reliance Communications, which has a similar arrangement with the French vendor decided to extend and enhance its partnership.
Bharti gave no reasons for exiting the JV but said its new business model would give it more control over the network.
Vodafone has been pushing its fixed offering for the past two years, but lacks the presence of Bharti, Reliance Communications and BSNL, while Idea does not have its own fixed business but owns a fibre optic cable network.
A Bharti spokesperson said that the carrier was open to other operators jointing the entity with equity participation but didn’t give any specific details.