This growth would be fuelled by the network expansion of telecom operators, keen to meet the data needs of consumers, it said.
"As per Icra estimates, debt to the tune of Rs 80,000- 90,000 crores can be pruned from the telecom industry if the stake sale transactions of tower assets currently under discussions materialise," it said.
With around 400,000 towers and 800,000 tenancies, the telecom tower space is a sizeable one in the world, it added.
It said the sector has 10 organised players (besides small tower owners) wherein nearly three-fourths of the portfolio (74 per cent) is controlled either by tower companies promoted by telecom operators, or by telecom operators themselves.
"Over the next one-three years, there is likely to be a material change in the industry structure a number of players expected to reduce to four-five," Icra predicted.
Summing up the upcoming trends, it said that one of the key developments would be the expected change in ownership from telecom operators to independent players, given ongoing consolidation moves and the interest from institutional investors and independent tower companies.
In addition, the industry is also headed for robust growth in the coming years fuelled by the network expansions of telecom operators, it added.
Also in the offing is upside in rentals due to improved negotiation power that would follow consolidation as well as from greater independent ownership, Icra said.
"At the same time, the consolidation transactions could entail migration of some debt to the tower industry from the telecom industry, where elevated debt levels remain an area of concern," it added.
Harsh Jagnani, sector head and vice-president Corporate Ratings, Icra said the industry is now on a "solid footing" to expand as the telecom sector pursues network expansion to meet the growing data needs.
"The industry generates steady cash flows given its indispensability to the telecom services and benefits from the inherent strengths of the lease agreements...which include long tenure, penalties on exit before a fixed lock-in period, per annum escalations in rentals, and incentivising addition of new tenants," Jagnani added.
Significant pressures on cash flows and stretched capital structure of the telecom sector have pushed operators to reduce their debt levels by monetising their tower asset ownership, Icra said and forecast a significant debt reduction once ongoing deals materialise.
"Icra estimates that the consolidation transactions in the tower industry would entail some debt migrating from the telecom industry to the tower industry. However comfort is drawn from the tower industrys relatively stronger balance sheet and greater predictability of cash flows," Jagnani said.