Reliance Jio Joins COAI to Expedite Broadband Penetration

Mukesh Ambani’s Reliance Jio Infocomm, a subsidiary of Reliance Industries, has joined the Cellular Operators Association of India, considered to be India’s top telecom operators’ association.

The Cellular Operators Association of India (COAI)

The core members of COAI are telecom companies that hold valid licenses, which provision communication services and are issued by the Government of India. With Reliance Jio on board, the number of core members in the association has gone up to 7. Other leading members of this association include Airtel, Idea, Vodafoneand Facebook.

Strategic Collaborations for Infrastructural Development

So far, Bharti Airtel is the only telecom company to have launched 4G services in a limited way in cities such as Pune, Bangalore, Kolkata and Chandigarh. However, the services are yet to exhibit any scalability, primarily because of high prices.

In October last year, Reliance Jio Infocomm Chairman Mukesh Ambani made a statement hinting a potential infrastructure-sharing collaboration with Bharti Airtel. This deal was later confirmed in December 2013. Interestingly, Founder,Chairman and Group CEO of Bharti Enterprises, Sunil Bharti Mittal, was earlier considered Ambani’s arch rival.

Reliance Jio is in the process of developing the digital infrastructure backbone and is slated to launch its 4G high-speed data and voice services in 2015. With the help of a collaborativeequipment procurement process, costs for services as well as infrastructure can be significantly reduced, subsequently facilitating economies of scale. Such collaborations can significantly influence how they offer affordable propositions to their end consumers.

In addition, Reliance Jio also struck similar infrastructure-sharing deals with Reliance Communications, American Tower Corporation, Tower Vision India, Ascend Telecom, Viom Networks and Bharti Infratel. The objective of such infrastructure-sharing collaborationsis to improve digital experiences pan-India.

Supporting Telecom Penetration

The company acknowledges the need to expand advanced data networks such as 4G in India. This is to expedite broadband penetration, which, at the moment, is weak in comparison to other developing nations.

Given the current pressure on mobile broadband data pricing, it is believed that strategic partnerships such as those between Reliance Jio and Bharti Airtel will not only make business sense for all parties but also benefit the consumers on the whole.

A spokesperson at Reliance Jio said, “We see ourselves contributing significantly by building out a nationwide high-speed data network. We are therefore pleased to join the COAI, where along with other operators; we hope to create an operating environment that will help us realize this ambition for all Indians as an industry, in the overall context of our nation’s development.”

The members of this association, headed by Rajan Mathews, cumulatively contribute to about 68% of the subscriber base and 71% revenue share in the market. In addition to the 7 core members, the COAI also consists of 12 associate members.

COAI has welcomed Reliance Jio with open arms. They expect considerable support from the company towards introducing affordable and innovative broadband services to Indian customers.

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