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| US tower firm slots $500 mn for India buy |
| Ishita Russell / New Delhi Nov 24, 2008, 00:09 IST |
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US-based American Tower Corporation (ATC) has earmarked an investment of about $500 million to acquire a stake in an Indian telecom tower company.
"We are open to spending up to $500 million depending on the size of the acquisition," said ATC Global Chief Executive Officer James Taiclet. The telecom infrastructure major is on track to spend $5-10 million a month in the country and is planning to expand its volumes, which would enable it to gain better penetration at a faster rate.
"Acquisitions could vary from small and medium to large ones. For small- and medium-sized acquisitions, it is not particularly about volumes but also about a platform. If we did have a platform today, we probably would’ve grown much faster. So, in the near term we will look at small- and medium-sized companies to expand, he said.
The company is looking at setting up 6,000 towers by 2010. "We are setting up anywhere between 50 and 100 towers a month, aiming at a target of 4,000-6,000 towers by the next couple of years and on those towers we expect to have at least two tenants, so that would amount to about 12,000 contracts for us."
India already has a bevy of tower companies and many have spun off their tower infrastructure into a separate company. Last year Bharti, Vodafone and Idea Cellular merged their tower assets by floating a new company Indus Towers, which had over 70,000 towers and is planning to own more than 200,000 towers in the next two to three years. Reliance ADAG has also spun off its tower business into a separate company called Reliance Telecom Infrastructure with over 16,000 towers.
While Essar has floated a company with over 4,000 towers, the Tatas have spun off the business into a separate entity. That apart there are independent tower firms such as GTL and Quippo Telecom Infrastructure, which offer towers to all telcos. Under government policy, telcos are allowed to undertake passive infrastructure sharing (towers) in order to reduce their capital costs.
While ATC is in talks with all the new telecom players for contracts, Taiclet said the existing players are also showing interest even though they might have their own tower companies.
"The companies might not want to go to some region or we might have towers in some areas where they do not want to set up, so they are also showing interest." Of the 200 towers that the company has set up over a span of eight months, most of the contracts are from existing players.
The company is banking on the introduction of 3G services as well as the entry of new players to fuel its growth.
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