Mumbai: Joining its larger rivals in getting out of the phone towers business, Tata Teleservics Ltd said it is in talks with six potential operators.
Tata Teleservices, which is part of the Tata Group, has 5,000 towers that were built with an investment of Rs1,000 crore.
Bharti Airtel, which has 34,000 towers, and Reliance Communications, which has 13,000 towers, have both said they too will spin off their tower businesses into separate companies.
Tata Teleservices has been a late entrant in the telecom sector and provides its mobile services based on CDMA technology. However, it is banking on the technology, which is capable of rolling out so-called third-generation, or 3G, services as soon as the Union government gives the green light, for growth.
Rivals who use GSM platforms will have to set up what are called base transciver systems (BTS), which could take three or four months to get going.
“We are expecting to hive off our tower infrastructure business in the next two to three months as we need to concentrate on our core business,” said Darryl Green, chief executive officer, Tata Teleservices. “We are looking for a company which can continue to provide us the services on the existing towers for a fee as well as provide us new towers where we need it.”
He declined to put a value on the proposed transaction or indicate whether the company will continue to hold a minority stake in the business.
Tata Teleservices operates in 20 circles and is aiming to increase its subscriber base from 15.5 million to 100 million by 2011. There were about 150 million mobile phone subscribers at the end of 2006 and the government expects the number of subscribers to triple to 500 million by 2010.
“We are planning to invest Rs3,500 crore in next financial year primarily into taking our services to 1,000 more towns and fulfilling the requirements for 3G services,” said Green.
Tata Teleservices currently operating in 3,400 towns. For the 12 months ending March, the company has so far invested Rs3,500 crore into the business.