Vodafone Idea Limited (Vi) and Bharat Sanchar Nigam Limited (BSNL) have reportedly kicked off discussions on sharing infrastructure and spectrum to reduce costs and potentially accelerate 5G roll-outs for both operators. The secretary, Department of Telecommunications (DoT), informed the Parliamentary Standing Committee on Communications and Information Technology that the two telcos have begun talks on possible sharing of towers, fibre and spectrum, as both struggle with capital expenditure pressures and uneven network strength across regions.
The committee expressed openness to the idea, noting that telecom towers owned directly or indirectly by BSNL should be shared with Vi in order to avoid duplication of infrastructure and unnecessary capex spend. It further observed that sharing infrastructure and spectrum assets “could expand service reach, optimise resource use, reduce expenditure, increase connectivity and accelerate 5G roll-out”. Further, DoT has been instructed to prepare and submit a detailed analysis of an infrastructure sharing plan, including a timeline and estimated financial savings, within six months.
The context makes the urgency clear. With Reliance Jio and Bharti Airtel commanding nearly 75 per cent of the wireless market share and leading the country’s 5G expansion, the proposed Vi-BSNL collaboration represents what may be the government’s last viable strategy to preserve a competitive third force in Indian telecom.
A look at the possibilities and bottlenecks for this proposal to move from discussion to reality…
Two weakened operators, one compelling logic
The financial reality driving these talks is difficult to ignore. Vi carries a total debt burden of approximately Rs 2.09 trillion, which includes Rs 876.95 billion in frozen adjusted gross revenue (AGR) dues and over Rs 1 trillion in spectrum payment obligations. Despite raising Rs 220 billion in fresh equity since 2024 and receiving significant AGR relief that restructures dues over 16 years, Vi continues to lose subscribers at a pace that undercuts its recovery narrative. Its average revenue per user (ARPU) of Rs 186 in Q3 FY 2026 trails Airtel’s Rs 259 and Jio’s Rs 213.7, limiting its ability to self-fund network investment.
BSNL presents a different, although equally complicated, picture. Following a government revival package worth over Rs 3.22 trillion, the state-owned operator has completed a major buildout of its indigenous 4G network. The TCS-led consortium has deployed over 97,500 towers running a homegrown technology stack, connecting more than 26,700 previously unserved villages.
BSNL also manages India’s most extensive fibre network, with approximately 700,000 km of optical fibre, including the BharatNet backbone, reaching over 215,000 gram panchayats. Yet its active subscriber ratio remains low and its technology stack is still in the process of proving operational reliability at commercial scale.
The two operators are, in many ways, mirror images. Vi is stronger in urban and semi-urban markets, with mature vendor infrastructure from Nokia and Ericsson, while BSNL commands rural India’s passive assets and fibre depth. Vi needs affordable backhaul for its planned 5G roll-out; BSNL needs traffic and revenue to justify its freshly deployed towers. The strategic logic for collaboration is, therefore, not incidental. It is structural.
How the sharing model could work
Passive infrastructure sharing, which involves co-locating equipment on each other’s towers without touching the active radio layer, is the most readily achievable step. India’s tower-sharing regulatory framework is mature and passive sharing requires no new spectrum rules or vendor integration. This could begin within 6-12 months of a formal agreement and would offer both operators immediate capex relief.
Fibre sharing is the next natural step. Vi could access BSNL’s BharatNet fibre assets for 5G transport through capacity lease or indefeasible right-of-use arrangements, avoiding hundreds of billions in rural fibre deployment that it cannot currently afford. BSNL, in turn, gains a commercial anchor tenant for infrastructure that is significantly underutilised.
Active radio access network (RAN) sharing, including multi-operator RAN or spectrum sharing, is where the real value lies and where the complexity escalates sharply. India’s current guidelines, framed in 2015, permit only intra-band spectrum sharing, requiring both operators to hold spectrum in the same frequency band. The Telecom Regulatory Authority of India’s (TRAI) April 2024 recommendations proposed expanding this to inter-band sharing and spectrum leasing, which would unlock far greater efficiencies. However, DoT issued a back-reference in early 2025 seeking further clarification and the framework has not yet been finalised. Without this regulatory enablement, the most impactful sharing arrangements remain legally unavailable.
The technology mismatch between Vi’s Nokia and Ericsson’s RAN, and BSNL’s indigenous Tejas and C-DOT equipment adds a further layer of complexity. While TCS has indicated that the stack is designed for interoperability with global vendors, active RAN integration at this scale across two such different ecosystems has not been attempted in any comparable market.
The case for collaboration
However, the potential benefits of a well-structured sharing arrangement are significant across multiple dimensions. For Vi, infrastructure sharing directly reduces the capex and opex burden that currently constrains its ability to compete. Rural coverage gaps that would otherwise require years of independent tower deployment could be addressed through access to BSNL’s existing network. This also improves Vi’s attractiveness to enterprise clients who demand nationwide coverage guarantees.
For BSNL, a sharing arrangement with Vi generates commercial revenue from towers and fibre assets that are currently underutilised. It also accelerates the credibility of its indigenous technology stack, which benefits from real-world multi-operator testing.
For consumers, particularly those in underserved areas, a stronger combined presence from two currently weak operators translates into better connectivity options. Competition is also preserved at a market level, which limits the pricing power of a pure Jio-Airtel duopoly.
According to a practice leader of mobile infrastructure at Omdia, “Vi and BSNL face an uphill battle against Jio and Airtel. Combining their assets would enable them to expand their coverage, improve their service quality, share the capex burden and reduce their operational costs, ultimately making them more competitive against the largest players.” On the consumer impact, Omdia added that the collaboration “should help improve their network experience, without being directly linked to mobile tariffs”.
What global precedents reveal
Infrastructure sharing between financially stressed operators and state-backed entities is not without precedent internationally, although outcomes have varied considerably over the years.
In the UK, the Shared Rural Network programme saw all four major operators collectively invest in shared rural masts, achieving 95 per cent geographic 4G coverage. The programme worked because all participating operators were financially stable and the sharing was limited to passive infrastructure in geographically defined zones, with each operator maintaining independent active equipment.
Spain offers a more instructive comparison for the active layer. Vodafone and Orange deployed a multi-operator RAN arrangement across approximately 14,800 sites in towns with fewer than 175,000 residents. Crucially, both operators maintained separate spectrum, independent core networks and distinct commercial identities. The roll-out was phased over more than a decade, beginning in smaller geographies before scaling.
Indonesia’s path is arguably the most relevant for India. Facing a fragmented market with multiple financially weak operators, the government facilitated full consolidation. The Indosat-Hutchison merger, completed using multi-operator core network technology, generated an estimated $300 million-$400 million in annual synergies and produced a credible third operator. XL Axiata and Smartfren announced plans to follow the same consolidation route.
The pattern across Southeast Asia suggests that sharing arrangements work best as a bridge and that mergers, where feasible, deliver more durable outcomes. For Indian policymakers, the Southeast Asian experience carries a pointed message – infrastructure sharing can buy time and reduce costs, but it is not a substitute for resolving the underlying question of whether three private operators, or two, is the sustainable market structure.
The risks that must not be underestimated
The most fundamental tension in any Vi-BSNL sharing arrangement is structural. The two operators compete for subscribers in every licensed service area. BSNL is simultaneously a potential infrastructure partner and a direct commercial rival, a conflict of interest that complicates every aspect of commercial negotiation, capacity pricing and investment planning.
The governance dimension is equally sensitive. The Indian government owns 100 per cent of BSNL and 48.99 per cent of Vi. Any commercial agreement between the two entities is effectively a related-party transaction, requiring a level of transparency and independent oversight that has not yet been established. In the absence of such a framework, the arrangement risks a regulatory challenge from Jio or Airtel citing preferential treatment, or a loss of investor confidence in Vi at a moment when it can least afford either.
There is also a dependency risk that deserves serious attention. If Vi relies on BSNL infrastructure to fill its coverage gaps rather than investing in its own network, it may reduce its long-term capital requirement as also reduce its strategic independence and attractiveness to future investors or acquirers. The Vodafone Group has been steadily reducing its exposure to the India business and a structure that deepens BSNL dependence could accelerate that exit rather than prevent it.
The road ahead
DoT’s six-month analysis mandate is a useful first step in a process that will span several years. For the Vi-BSNL collaboration to deliver on its stated objectives, the regulatory framework on spectrum sharing must be finalised, passive sharing must begin immediately without waiting for active RAN decisions and any commercial arrangement must include investment obligations that prevent sharing from substituting network development.
The story of telecom consolidation globally is clear – sharing works best when it is structured, time-bound and embedded in a broader recovery plan with independent oversight. The Indian government has already committed substantial public capital to keep both operators viable. The question is whether the institutional architecture, regulatory will and commercial discipline exist to convert that investment into a genuinely competitive third force, rather than a managed retreat.
Shashwat Singh
