Etisalat DB, the Middle East-based operator which has entered the Indian mobile services space through a strategic acquisition in Swan Telecom, announced today that it has entered into ten-year telecom infrastructure sharing agreement with Reliance Communications (RCom).

The deal which the tie-up claims is the largest agreement of its kind in the Indian telecom infrastructure space is valued at 2.2 billion.

The deal will require Reliance Infratel to manage responsibilities related to telecom infrastructure requirements of Etisalat while Reliance Communications will manage the transmission infrastructure. The deal is for passive infrastructure and spans across 15 telecom circles where Etisalat is gearing up to launch its services.

Mr. Mohammad Hassan Omran, Chairman Etisalat said, “This significant development is 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, speed to market and cost-effective roll-out of services. We are pleased to partner with Reliance Communications and Reliance Infratel, which have an extensive capability as an integrated service provider across the telecom infrastructure value chain. Strategic alliances are an integral part of our plans for growth and Etisalat Group will always be receptive to such alliances which help to enhance the customer experience.”

Mr. Anil Dhirubhai Ambani, Chairman, Reliance ADA Group said, “We are pleased to partner with Etisalat DB through this landmark agreement that will re-define the future of Indian Telecom sector. This win-win agreement demonstrates Reliance Communications capabilities to enable the operators to go-to-market with a bouquet of telecom infrastructure services. This will ensure a faster rollout, optimum costs and a time to market advantage. The vision of our Group founder, the Late Shri. Dhirubhai Ambani, for enhancing customer choice with pro consumer, pro competition philosophy, has inspired us to transform industry dynamics and reinvented economic models.”

Reliance Infratel is believed to have 50,000 telecom towers with over 2 lakh site tenancy capability and over 1.8 lakh kms of nationwide optic enabling transmission connectivity.

Its reach spans over 20,000 towns and over 5 lakh villages.

The two parties were reported to be in talks since January this year. Interestingly it was around the same time that some members of the Parliament had demanded a probe into ownership details of Swan. The MPs demanded to investigate if Swan was directly or indirectly controlled by the ADAG Group.  

Swan had also entered into an MoU with BSNL late last year for infrastructure sharing. Even this move came under scanner as it was alleged that BSNL was unduly favouring Swan.