American Tower eyes Indian acquisition

American Tower eyes Indian acquisition

New Delhi: Boston, US-based American Tower International Inc., a unit of one of the biggest wireless tower operators in the US, is exploring acquisition options in Indian tower companies. Specialist tower firms such as Bharti Infratel Ltd and Reliance Infrastructure Ltd have been spun off from eponymous phone firms Bharti Airtel Ltd and Reliance Communications Ltd.

Bharti Airtel and Reliance Communications plan to sell up to 25% equity in their infrastructure subsidiaries as they seek to move out of non-core areas and also unlock value in the tower business. Others such as Quipo Telecom Infrastructure Pvt. Ltd, Essar Telecom Infrastructure Pvt. Ltd and GTL Infrastructure Ltd are also rolling out tower assets.

In addition to exploring small stake buyouts, the international unit of American Tower Corp. will also look at “managing tower businesses of Indian telecom operators who may want to hand over the tower business to experts like us," said Amit Sharma, president Asia, American Tower International. “We are already in discussions with several operators in the country."

With spectrum becoming scarce, telecom companies are aggressively adding towers to ensure wider coverage and ensure quality of service. As they expand into rural areas, where teledensity still is around 6%, they are also looking to save cost by exploring options to share infrastructure with other operators and independent tower companies.

According to an August research note by the Mumbai-based First Global Securities Ltd, the Indian telecom industry will need another 150,000 towers by 2011, when the country reaches the 500 million subscriber mark. Bharti Infratel will have nearly 61,000 towers by 2010, while Reliance will have around 50,000 towers by then, the report said.

Even as operators build their own tower businesses, independent firms such as American Tower hope there will be enough need for their towers “as not all operators would be comfortable sharing infrastructure with competing telcos," said Sharma.

American Tower will be competing with other tower firms such as GTL Infrastructure and “will be aiming to have at least 10% share in the market," said Sharma, declining to set a time frame within which to achieve this target.