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* Companies to share telecoms infrastructure, may extend toother areas
* Deal may speed up Reliance 4G launch, yield revenue forBharti - analysts
* Bharti, Reliance Comm shares slip, Bharti Infratel gains
By Prashant Mehra
MUMBAI, Dec 11 (Reuters) - Conglomerate Reliance IndustriesLtd and top mobile operator Bharti Airtel Ltd have agreed to share network infrastructure, as theold adversaries in India's crowded telecoms industry set asidedifferences to save costs.
The companies, headed by longtime rival billionaires,undercut each other during Reliance's last foray into telecomsnearly a decade ago. Now they will work together as they moveinto data-driven telecommunication services.
Reliance's Mukesh Ambani, India's richest person accordingto Forbes magazine, and Bharti's Sunil Mittal, India's 10thrichest, will continue to be rivals in the fast-growing retailmarket.
The agreement involves sharing inter- and intra-city opticfibre networks, submarine cable networks, communications towersand internet broadband services, and may extend to other areasof telecommunications, the companies said in a joint statement.
"With two prominent rivals co-operating and withinfrastructure being shared, there should be cost savings," saidAmbit Capital telecoms analyst Ankur Rudra. "It will lead to abetter industry structure."
Mobile telephone network providers have been plagued by weakreturns for years and face significant investment infourth-generation services, which would have encouraged the pairto come together, said Rudra.
Reliance has spent billions of dollars to offer low-pricedwireless broadband after winning a licence three years ago toprovide 4G services across India.
It is working toward launching commercial services bysigning a number of deals this year, including deals to sharenetwork and infrastructure with rival Reliance CommunicationsLtd, controlled by Mukesh's once-estranged youngerbrother Anil Ambani. It has also agreed to lease undersea cablecapacity from Bharti.
Ten years ago, Mukesh Ambani transformed the telecomsindustry by offering cheap calls and handsets, hurting rivalsincluding Bharti. Mukesh moved out of telecoms in 2005 after asplit in the family empire.
Mukesh's second entry into telecoms has fuelled concern ofanother price war which few players can afford, after a periodof calm followed years of undercutting each other.
Entrenched but debt-laden rivals such as Bharti, VodafoneGroup PLC and Idea Cellular Ltd face a steepincrease in the cost of radio spectrum as well as hundreds ofmillions of dollars in government fees due to regulatoryupheaval, after a massive telecoms licensing scandal that cameto light in 2010.
Bharti has been pushing to increase revenue from high-marginservices. It launched 4G networks in some cities and intends toexpand the services rapidly.
The deal with Reliance will help it and tower unit BhartiInfratel Ltd boost revenue by leasing outinfrastructure. Bharti will also benefit from sharing Reliance'snationwide network, analysts said.
The companies did not disclose financial details of theiragreement, but said pricing would be "based on prevailing marketrates."
"The cooperation is aimed at avoiding duplication ofinfrastructure, wherever possible, and to preserve capital andthe environment," the companies said.
Shares of Bharti Airtel closed down nearly 2 percent whereasthose of Bharti Infratel rose 2.9 percent in a weak Mumbaimarket. Reliance Communication and Idea Cellular eachended down about 3 percent. Reliance Industries shares endeddown 0.2 percent.
