According to the Telecom Regulatory Authority of India (Trai), India has a mobile subscriber base of 150 million. There are about 90,000 towers set up by all mobile operators. The government has targeted a subscriber base of 500 million by the end of 2010. Assuming the same level of sharing, the industry would need 220,000 additional towers.

“The cost of setting up one tower is Rs 22-25 lakh at present,” said Prakash Ranjalkar, chief operating officer, GIL. “Therefore, the total investment in the tower business would be to the tune of Rs 50,000 crore.” The two factors that make independent towers a viable business in India are high competition and low ARPUs. With up to seven players providing mobile services in a circle, India is the most competitive market in the world. “At Rs 330 per month for GSM services, India has one of the lowest ARPU in the world,” said Nripendra Misra, chairman, Trai.

Moreover, it is falling by 10 per cent per annum. In other Asian countries, there are only two or three players in the field and their ARPUs are higher compared to those in India. Therefore, independent tower providers could not develop in these countries.

In the US, there are about six players in the field and, hence, independent tower companies have emerged as big players. There are three big companies in this space — American Tower, Crown Castle and SBA Communications. Recently, Crown Castle bought Global Signal, another major tower company, for $5.8 billion.

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