Reliance Jio’s foray making telcos to invest more in networks: Juniper’s Rami Rahim

NEW DELHI: The US-based networking solutions company Juniper said that due to Reliance Jio’s entry and India’s ongoing telecom market consolidation, fueled by intense rivalry, would increase incumbents’ capabilities to spend more on mobile networks.

“Reliance Jio is being very aggressive, seized the opportunity ahead and is out to win. But others are also responding and that is resulting in a need to invest in network infrastructure,” Juniper Networks global chief executive Rami Rahim told ETTelecom, adding that telcos’ appetite to invest in networks has increased when compared a year ago.

Indian telecom market is witnessing massive consolidation, following the disruptive entry of billionaire Mukesh Ambani-owned Reliance Jio Infocomm (Jio) in September 2016 that led revenues of existing players such as market leader Bharti AirtelBSE -0.80 %, UK-headquartered Vodafone India and Aditya Birla group’s Idea Cellular shrink consequently.

Telecom analysts including Bharti’s Sunil Mittal believe that country’s telecom sector would have four service providers including state-run Bharat Sanchar Nigam Limited (BSNL), bringing enormous sectoral growth potential in a longer haul.

“Too many players that are going after the same market, is typically unstable. Now what we are seeing is a sort of a consolidation and a reduction to a relatively few number of competitors that have the scale and ability to invest,” the top executive added.

India’s No 2 and No 3 telcos Vodafone India and Idea Cellular, in a $23-billion merger, announced on March 20, 2017, are expected to create country’s largest telecom firm, replacing dominant Bharti Airtel, and would better placed to take on competition from newcomer Reliance Jio.

Bharti Airtel too, in the wake of heightened telecom rivalry, has acquired consumer mobile businesses of Mumbai-based Tata group’s Tata Teleservices Ltd (TTSL) and Tata Teleservices Maharashtra Ltd (TTML) in 19 telecom circles in a cash-free and debt-free deal between the two.

Early this month, country’s No 1 telco also received a nod from the National Company Law Tribunal (NCLT) for the acquisition of Norwegian telecom firm Telenor’s India operations which is expected to add more than 40 million subscribers to Bharti Airtel’s existing base of 290 million.

Aircel’s attempted merger with Anil Ambani-driven Reliance Communications (RComBSE 1.92 %) last year hitting regulatory and legal barriers, C Sivasankaran founded company, in February 2018, filed for bankruptcy in the National Company Law Tribunal.

Even as the Indian telecom landscape is set out for a radical change with a four-player market from nearly a dozen of service providers across 22 service areas, two years ago, the US-based company sees opportunity as telcos seek to scale up their networks in metro cities with cost-effective solutions on the back of robust data growth.

“The telco space may be very competitive and puts pressure on telcos because what they are looking at, is increasing capacity growth but with pressure on top line, on revenue. That is a perfect opportunity for somebody like Juniper that is an innovator in transforming the economics of networking,” Rahim added.

Juniper relies on more than 70% telco business, and nearly 30% of its revenue comes from enterprise including government segment worldwide.economictimes