India's Vodafone Idea and BSNL eye infrastructure sharing to stay competitive

　　India's third-largest service provider, Vodafone Idea, and state-owned BSNL are in talks to share towers, fiber and potentially spectrum, in what would have been an unlikely alliance a few years ago.

　　The Department of Telecommunications (DoT) confirmed that the two companies are in talks in a report submitted to a parliamentary panel last month, with discussions moving beyond simple tower sharing towards active infrastructure sharing. The central piece behind this partnership is the Indian government, which holds nearly 49% of Vodafone Idea following its bailout interventions, while BSNL is entirely state-owned.

　　Over the last few years, both Vodafone Idea and BSNL have been facing financial and operational challenges. Both are struggling with mounting subscriber losses and falling average revenue per user (ARPU).

　　Vodafone Idea is under massive debt and has been losing subscribers to its competitors Reliance Jio and Bharti Airtel. On the other hand, BSNL has been struggling with delayed technology upgrades in spite off several revival packages and a declining market share. BSNL launched a pan-India 4G network only last year while Vodafone Idea started offering 5G services last year.

　　In this context, infrastructure sharing is a sensible approach for both companies to maximize the use of available resources. There are several synergies between the two telcos. While Vodafone Idea is a stronger player in cities, BSNL is known to have a presence in the country's hinterland. Infrastructure sharing might help with reducing capital expenditure and possibly even faster coverage expansion for the two companies.

　　"In regions where BSNL has stronger presence and Vodafone Idea is comparatively weaker, or vice versa, collaborative utilisation of towers, fiber, spectrum and other network assets would expand service reach, optimise resource use, reduce expenditure, increase connectivity and accelerate 5G rollout," says the twenty-third report on "Demands for Grants (2026-27)," which was tabled in Lok Sabha, the lower house of India's parliament, last month. It further asks the DoT to prepare a detailed analysis on the sharing of network assets to be submitted to the parliamentary committee.

　　What is of particular significance is spectrum sharing, which is being discussed between the two companies. Vodafone Idea's 900MHZ can help BSNL in its network expansion. It also means that BSNL may not be required to invest heavily in spectrum acquisition.

　　At the same time, the two companies have very different work cultures. Vodafone Idea is a well-managed corporate company with a strong brand presence. BSNL, on the other hand, is bureaucratic in its working style and comes with a strong social mandate. In addition, according to media reports, the Telecom Minister Jyotiraditya Scindia has mentioned that collaboration will be based on commercial interests of the two companies and DoT is not involved in the process.

　　Effective collaboration between BSNL and Vodafone Idea could help strengthen a viable third player, which is required to prevent India's slide into a duopoly. It could also accelerate BSNL's launch of 5G services by improving network economics, particularly in rural and low-ARPU regions.