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New Delhi:As India gears up for the rollout of 5G wireless service, telecom infrastructure providers are pushing for an infrastructure sharing policy to ease the financial burden of an industry facing liquidity challenges.

“Considering the present financial condition of the telecom operators, we feel that the enhanced form of infrastructure sharing that is active infrastructure sharing by IP-1 (infrastructure provider category-1; typically tower companies) is the only way forward for the industry," said TR Dua, director general, Tower and Infrastructure Providers Association (Taipa).

The rollout of 5G will require massive deployment of towers and dense fiberization. The electronic elements—core or intelligence in any network—embodied in base stations and other equipment for mobile networks, access node switches, and management systems for fibre networks are part of active infrastructure.

Currently, sharing of active infrastructure is limited to antenna, feeder cable, radio access network (RAN), and transmission system among telcos only. Tower and infrastructure providers install these active elements but only for telcos.

Given the size of network and infrastructure required to support 5G, the investment is expected to run into billions of rupees.

The total capital expenditure required for the rollout of 5G, including spectrum, sites and fibre, is expected to be around 1.3-2.3 trillion, of which 78,800 crore to 1.3 trillion is estimated for metros and A circles, according to a report by Motilal Oswal Financial Services released in October.

The active infrastructure sharing policy, recommended and backed by the Telecom Regulatory Authority of India (Trai), is expected to cut costs for telecom operators, enhance coverage and network quality, and improve pricing and choice for consumers.

In a letter to the department of telecommunications (DoT) in January, Taipa urged implementation of the active infrastructure sharing policy, without any licencing of such players. Mint has seen a copy of the letter. Taipa, in the letter, said, “It will not impact the revenue/licence fee being collected by the government as IP-1 will not provide the services directly to the end consumers and share the infrastructure only with the licensed telecom operators on B2B basis".

Bharti Airtel Ltd-owned Indus Towers Ltd, which has become the largest mobile tower company outside China after its merger with Bharti Infratel Ltd, is a Taipa member. Indus Towers serves Reliance Jio Infocomm Ltd, Airtel and Vodafone Idea Ltd.

ATC Telecom Infrastructure Pvt Ltd, Ascend Telecom, Summit Digitel Infrastructure and Tower Vision are also members.

"The steep fall in revenues and ballooning debt is hurting investments in telecommunication infrastructure, networks, and technologies… Telecom infrastructure creation for the rollout of new technologies such as 5G, machine-to-machine/IoT (internet of things) and deployment of smart cities, requires huge amount of investment," said Dua.

Trai in a recommendation in 2020 had said that infrastructure sharing tends to impact coverage, quality of service, and pricing of services to consumers positively, as the cost-saving characteristics of infrastructure sharing allow for increased efficiency.

Sharing of active infrastructure for the rollout of 5G can reduce cost by over 40%, while up to 50% can be saved if three operators deploy small cells, which are wireless transmitters and receivers for smaller areas, on a shared basis, consulting firm McKinsey & Company said in a 2018 report.

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