Etisalat outsources Indian telecoms infrastructure

Etisalat's Indian subsidiary has signed a US$2 billion (Dh7.34bn) infrastructure outsourcing deal that will let the company launch services without the need to build its own network. As part of the agreement, Etisalat will use a telecommunications network built and maintained by Reliance Communications, one of India's largest telecommunications companies, rather than building its own network as it has done in other markets such as Egypt and Nigeria.

Anil Ambani, the chairman of the Reliance ADA Group, which will build and manage the network, said the deal would "redefine the future of the Indian telecoms sector". It would give Etisalat "a faster rollout, optimum costs and a time-to-market advantage", he said. Outsourcing the construction and maintenance of the physical infrastructure that powers mobile networks has become a hot topic in the industry, as mobile operators look to cut costs and boost margins.

The Indian market, which added as many new mobile customers as the entire Arab world combined last year, is emerging as a leader in the outsourcing field. Industry analysts have forecast that 150,000 mobile transmission towers need to be built in India by the end of next year, simply to keep up with demand in the world's fastest-growing telecommunications market. The construction boom has attracted a number of overseas players, including Dubai's Vox Spectrum.

The company recently attracted a $7 million private equity investment, aimed at helping it capture a greater share of India's mobile infrastructure market. Mohammed Omran, Etisalat's chairman, said the Reliance partnership was "part of our overall commitment to provide consumers with quality service and reach at the time of launch. As a new entrant in this dynamic market, this alliance provides us with key strategic advantages that will ensure a robust, speedy and cost-effective roll-out of services".

Etisalat entered the Indian mobile market late last year, paying $900m to acquire a 45 per cent stake in Swan Telecom, a newly licensed operator owned by a large Indian property group. It hopes to launch commercial services in the country by the end of the year. tgara@thenational.ae