|
| Quippo buys TTML's towers, now largest independent firm |
| BS Reporter / Mumbai Mar 18, 2010, 00:24 IST |
|
Quippo Telecom Infrastructure and Wireless TT Info Services (Quippo-WTTIL) has acquired the tower business of Tata Teleservices (Maharashtra) Ltd, a Tata Group company, in a deal valued at Rs 1,318 crore.
This would take the overall portfolio of Quippo-WTTIL to over 38,000 towers, making it the largest independent tower company in India. GTL Infrastructure, which purchased Aircel’s tower business recently, has 32,500 towers. American Tower Company is the third largest, with 25,413 towers.
However, the ranking could change, with GTL also committing to 20,000 more towers over the next three years. On completion of this roll out, GTL Infra is expected to have a portfolio of more than 50,000 towers across India.
In a statement issued today, TTML said it would sell all the stake in its wholly-owned subsidiary, 21st Century Infra, which has 2,535 towers in Mumbai, Maharashtra and Goa.
This deal would add Rs 900 crore cash to TTML’s books. “This transaction allows us to focus on our core business priorities of strengthening our market leadership in the voice and data segments. The cash inflow from this transaction in excess of Rs 900 crore will support our ambitious investment and growth plans,” said Mukund Govind Rajan, Managing Director.
The deal, done at Rs 52 lakh per tower, is higher than some recent deals in the telecom tower space. GTL’s Rs 8,400-crore acquisition of Aircel valued each tower at Rs 48 lakh, while American Tower’s Rs 2,000-crore acquisition of Essar’s telecom towers valued every tower at Rs 45 lakh.
As part of this deal, 21st Century has given a commitment to roll out approximately 4,000 towers over a period of five years in Mumbai, Maharashtra and Goa.
The deal gives Quippo a strategic advantage, as it did not have a significant presence in Mumbai, Maharashtra and Goa.
The tenancy ratio of 21st Century Infra is 2.15, which would improve Quippo-WTTIL’s current tenancy ratio of 2.
Analysts said such consolidation in the telecom tower space was waiting to happen. Alok Shende, co-founder and principal analyst, Ascendia Consulting, said with falling ARPUs (average revenue per user), the room to accommodate capital charge for setting up passive infrastructure was shrinking.
And, with falling rentals and valuations for tower companies, the merit to continue holding assets on the book of telcos was giving way to sell-offs. The tower space would have three to four companies operating nationally, he said.
“The acquisition complements our tower portfolio in the strategically important markets, at the same time providing us a contiguous network nationally. The proposed transaction will result in a renewed robust organisation with enhanced product profile in new geographies, economies of scale with numerous cost benefits due to operational synergies and a stronger financial position,” said Sunil Kanoria, Director, Quippo-WTTIL.
In December last year, Tata Teleservices (TTSL), another Tata Group telecom company, had merged its passive infrastructure business with Quippo. Next month, TTSL sold 49 per cent of its tower arm, Wireless-TT Info-Services (WTTIL) to Quippo Telecom Infrastructure for Rs 2,400 crore in cash. TTSL holds 51 per cent stake in this venture. In December 2007, Quippo had acquired 1,000 towers from Spice, along with rights to roll out 12,000 towers.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
