Providing towers to telecom operators is emerging as a big stand-alone business, thanks to booming mobile telephony in India. With an estimated requirement of 220,000 new towers in the next three years, the total investment in this business is expected to be over Rs 50,000 crore.

At present, telecom service providers set up their own towers. In some locations, they share them with their competitors on a barter system. Now that telecom operators are expanding in category ‘B’ and ‘C’ circles, they have to make huge investments to sett up passive infrastructure such as telecom towers and power supplies. Operators are also expecting lower average revenue per subscriber (ARPU) from new subscribers.

The industry is now realising the importance of independent tower providers. GTL Infrastructure Ltd (GIL) has already set up 1,200 towers and counts all the big service providers, including Airtel, Idea, Tata, Hutch and Spice as its customers. Global players like Crown Castle and American Towers are planning to enter the Indian towers market while Quipo, TVS Interconnect Systems and Acme are among the Indian players interested in this segment.

Industry observers say that three major operators - Reliance Infocomm, Bharti and Tata Teleservices — are planning to hive off their tower divisions into separate entities to unlock the value from these assets. However, independent tower providers will always have an edge over tower companies of telecom operators as far as credibility is concerned.

“Setting up towers is not the core competency of telecom operators. Therefore, specialised companies which have domain expertise in this area should take up this activity to enhance the cost effectiveness of this element for service providers,” said T V Ramachandran, director general, Cellular Operators Association of India (COAI).

... contd.