Trai contemplating regulations for telecom tower biz

Telecom regulator Trai is mulling to bring the tower business of telecom companies under the ambit of regulations so that the Department of Telecom can consider a separate policy for the segment at a later stage.

At present, there is no separate law governing the towers either on technical or on financial aspects even though almost all the operators have now stand-alone tower business.

The regulator's move comes in the backdrop of many tower businesses selling stakes or planning to raise money through IPOs. Yesterday only, telecom infrastructure major GTL bought tower business of Aircel for Rs 8,400 crore.

To start with, Trai has come up with a pre-consultation paper seeking comments on various issues of towers. It is contemplating to come up with a consultation paper on design, structure and erection of mobile towers. It is also looking at the impact of possible radiation out of such towers and right of way in erecting such structures.

Trai chairman J S Sarma told PTI that "the purpose to go for pre-consultation on such an issue is we want operators and experts to come up with the ideas beyond those already in the paper. We want to get new dimensions on the subject and as of now this is a suo moto action".

If TRAI decides to go ahead with a consultation paper and submits recommendations on it, it will be up to the Department of Telecom to act on those proposals and a separate tower policy could be brought out.

TRAI's feedback will be broadly on regulatory issues, said an official from Trai. Based on the feedback of the industry and experts, it will issue a consultation paper and frame the questions in a way that the response comes as a direct answer to them, the official added

Both Bharti Airtel and Reliance Communications have separate tower firms Bharti Infratel and Reliance Infratel. Bharti Airtel and Reliance Communications, in the past had sold stakes in those firms at astronomical valuations when the bull market was raging before the credit crisis. The two also plan IPOs for their tower units. Reliance Infratel has 40,000 towers.

Tata Teleservices (TTSL) last year merged its infrastructure business with independent infrastructure equipment rental company Quippo Telecom Infrastructure (QTIL) to form the country’s largest independently managed tower company with an enterprise valuation of Rs 13,000 crore.

Indus with 80,000 towers is a combined venture between rival telecom operators Bharti Airtel, Vodafone Essar and Idea Cellular, this entity will be run by independent professionals.

India's largest company in the tower business Indus owns about 80,000 towers. Reliance Communications has also hived off its infrastructure arm, Reliance Infratel, which has around 40,000 towers.

The Quippo-Tata combined entity will, therefore, have a portfolio of over 18,000 towers.