TELECOM TOWER COS AIM HIGHER, MERGE TO REACH OUT

India’s telecom tower industry is set for a wave of consolidation with small and medium sized firms opting for mergers or alliances to take on larger rivals and hasten rollouts in the face of rising demand. India’s position as the fastest growing wireless market in the world has attracted several global players such as UK’s Vodafone Plc, Japan’s NTT DoCoMo and UAE’s Emirates Telecommunications Corp (Etisalat).

“Under the current circumstances, when competition is so severe at operators’ end, the tower companies have to become much more efficient,” said Ravi Sharma, executive chairman of industry body CMAI Association of India. “They will only survive, provided they have more than three tenants per tower,” he said. “Now to get to that, there will be consolidation amongst companies.”

Earlier this month, two sources had told Reuters that GTL Infrastructure Ltd was leading the race to buy the tower holdings of Aircel, the Indian unit of Malaysia’s Maxis, in a deal valued at $1.6 billion to $1.7 billion. Private equity firm New Silk Route, which owns a stake in tower leasing firm Aster Infrastructure, is reportedly in talks with Essar Telecom Infrastructure to buy a stake in the latter. The consolidation spree was kicked off in 2007 when India’s top mobile operator Bharti Airtel, Vodafone Essar and Idea Cellular decided to pool their resources and hived off their towers into an independent firm, Indus Towers.

MINT