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13 December 2022

Meta expands Indian influence with far-reaching Airtel alliance

In April 2020, the Indian telecoms market was shaken up when Facebook (now Meta) took a nearly-10% stake in disruptive operator Reliance Jio, now the mobile market leader. In the wake of that deal, Jio secured other investors, including Google and Qualcomm, while Google also took a stake in Bharti Airtel, now the second largest operator. Microsoft was also said to be interested in stakes in at least one Indian provider, as all the US hyperscalers seek ways to capitalize on the huge size and growth potential of the Indian market, which will certainly be easier to achieve with local partners that have established channels and brands to the vast base of businesses and consumers.

More than two years on, there have been various cooperations over digital and cloud services, and now that the two largest operators have secured 5G spectrum, and are starting to deploy networks at breakneck speed, there will be new incentives to intensify their alliances with the hyperscalers. Bharti Airtel has announced a broad partnership with Meta, which covers Open RAN, slicing and networks platform-as-a-service models, and subsea cables.

The Open RAN element is interesting. Airtel had been an active participant in O-RAN trials and plugfests and in Telecom Infra Project (TIP), the organization set up by Meta to drive open, commoditized and virtualized network architectures in RAN, transport and broadband. However, when Airtel and Jio announced their first 5G vendors, they had stuck with conventional suppliers (Ericsson and Nokia) and architectures. Jio had even reduced the share of its sole 4G macrocell vendor, Samsung, despite the Korean firm’s commitment to Open RAN.

So this aspect of the new Airtel-Meta deal may signify efforts by the US firm to support a valuable TIP/Open RAN supporter – and one with the potential to deploy at massive scale – in getting back on the O-RAN track.

In particular, Airtel and Meta plan to cooperate on improving the operational efficiency of Open RAN using jointly developed AI/ML models and analytics, which Airtel will use to optimize energy management and RAN automation.

The operator also said it is conducting trials of 4G and 5G Open RAN in the state of Haryana and that it plans to deploy the technology in several areas over the coming year, mainly – initially at least – in rural areas.

“Airtel will share its learnings with wider ecosystem partners within the TIP community, including Meta, to help accelerate the deployment of Open RAN-based networks across the world,” said the company in a statement.

This is a classic example of a hyperscaler supporting and part-funding a deployment by a large operator in order to drive confidence into a platform it favors, with a view to accelerating roll-out and availability of high-quality connectivity in large and high-growth markets. None is more important, from this viewpoint, than India, but Meta will also hope that the lessons learned from Airtel’s efforts will speed up adoption elsewhere too.

The two partners also said they will work together on communications platform-as-a-services (CPaaS) capabilities to address rising demand for cloud-based services in India. Airtel will integrate Meta’s WhatsApp with its CPaaS platform, Airtel IQ, to give enterprises access to “WhatsApp’s features and reach to provide an unparalleled omnichannel customer engagement”. India is the most important user base for WhatsApp, which has over 400m users in the country, making it a very valuable channel for enterprises to use to reach consumers.

In financial terms, the subsea cable element of the Meta/Airtel deal is likely to be the largest, and to have the greatest near-term substantive impact. The two firms will cooperate to bring 2Africa Pearls, the world’s longest subsea cable system, to Airtel’s landing station in Mumbai. They will also invest in dedicated capacity to strengthen the Indian company’s subsea network portfolio, also partnering with Saudi Telecom (STC).

The 2Africa consortium includes Meta, China Mobile, Vodafone, MTN, STC, Telecom Egypt, West Indian Ocean Cable Company, GlobalConnect and Orange. Launched in 2020, it will connect Europe, Africa and Asia once it is completed next year, and will increase data capacity for India.

“Subsea cables and open, disaggregated networks continue to play a huge role in the foundational infrastructure needed to support network capacity and fuel innovation,” said Francisco Varela, VP of mobile partnerships for Meta, in a statement.

Earlier this year, Airtel also joined another subsea cable consortium, SEA-ME-WE-6, while Reliance Jio is working with India-Asia-Xpress (IAX) and India-Europe-Xpress (IEX) on another subsea cable project.

Like telecoms equipment vendors, the webscalers face a double challenge – identifying growth regions as their core markets get more saturated and replicating their model effectively; while seeing some opportunities being constricted by geopolitic and recession. Of the famed BRIC (Brazil Russia India and China) economies, which were meant to deliver huge growth for ICT in the first quarter of the twenty-first century, China is increasingly closed to US providers, and Brazil and Russia are hit by economic meltdown, war and isolationist politics. That leaves India – certainly badly affected by the pandemic, and with its own brand of populist government, but still open for business and keen to stimulate its economy and its hi-tech ecosystem with help and money from US partners.

Against this backdrop, Facebook, Microsoft, Amazon AWS and Google have all been intensifying their efforts to secure Indian partnerships and to make investments in telcos.

Even before the investments of 2020 in Jio, Microsoft Azure was the operator’s primary cloud partner,  having signed a 10-year contract in 2019, which will see Jio building two data centers for Microsoft and moving many of its services to Azure; while the pair can offer joint packages of cloud services and connectivity, which will probably soon expand to edge computing, to customers.

These relationships between multiple webscalers and telcos seem complicated, but at this stage, the former group will be thinking more about seizing the Indian market for their own model, rather than see a local or Chinese player become dominant – how they carve things up between them can come later.

Furthermore, Amazon AWS has a significant alliance with Airtel that enables the US giant to tap into Bharti’s customer base of 280m subscribers and large numbers of small and medium enterprises, to push its content and cloud services and increase its share of the e-commerce market, in a country which has a large number of local, smaller-scale online retailers.

By going further and providing investment and funding for India’s indebted telcos, the hyperscalers can achieve significant influence over their future network plans. This could be a way to drive adoption of open network platforms and distributed edge/5G architectures, of the kind the webscalers support heavily as they seek to reshape the telecoms platform, in a way that better suits their own economics and business models. (See Wireless Watch May 29 and April 24 2020 editions for full analysis of these dynamics).

Google’s collaboration with Jio Platforms is initially heavily focused on developing affordable devices and localized applications, based on Android. Facebook has similar activities, aiming to create a multi-functional ‘super-app’, somewhat like China’s all-encompassing WeChat, with Jio.

Given the power of the Android operating system, and of Facebook’s social media and WhatsApp services, driving further uptake, and seizing control of the consumer user experience in a vast mobile-centric market like India, will be the low hanging fruit. At RIL’s annual general meeting, CEO Mukesh Ambani said Jio is targeting 500m mobile subscribers, 1bn smart sensor connections and 50m homes and businesses for its 4G/5G network, by the end of 2023.

More ambitious, infrastructure-focused and enterprise-oriented cooperations will follow.

For instance, Google’s investment in Jio is not just about reaching more consumers and enterprises with Android-powered Google services. It will also be designed to help accelerate the expansion of infrastructure to a larger user base, by pushing (along with Meta) the kind of open platforms and spectrum in which Google believes.

The cooperation also fits into India’s drive to be more self-sufficient in technology, and to create an India-first 5G ecosystem. Currently, Chinese brands account for about 80% of India’s mobile devices market, despite the growth of some local providers like Spice.

The Jio stake is also part of a wider Google for India Digitization Fund, which aims to invest $10bn in the next 5-7 years in accelerating the country’s digital economy.

Google CEO Sundar Pichai announced the fund, saying: “Getting technology into the hands of more people is a big part of our mission,” while at the same time, the cooperation with Jio and other digital partners would improve the mobile experience and services for all Indians, and for users in other emerging countries.

The fund will work through a mixture of “equity investments, partnerships, and operational, infrastructure and ecosystem investments”, according to Pichai.

Its priorities, he said, will be:

  • enabling affordable access and information for every Indian in their own language, – Hindi, Tamil, Punjabi or any other
  • building new products and services that are deeply relevant to India’s unique needs
  • empowering businesses as they continue or embark on their digital transformation
  • leveraging technology and AI for social good, in areas like health, education, and agriculture