Published by – Jitendra Khuntia
Category - Business & industry & Subcategory - Telecom
Summary - Evolution of Telecom Tower Industry in India
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Telecommunicationhas emerged as a key driver of economic and social development in modern era.In little over than last two decades, the Indian telecommunication sector hasundergone radical changes and in the process India become the world’s secondlargest telecommunication market with more than 1 billion subscribers. As perone report, the telecommunication sector’s contribution to Gross DomesticProduct (GDP) which is presently 6.5 percent and will likely to increase to 8.2percent by 2020. The growth story of Indian telecommunication is incompletewithout accounting for the telecom towers. Subscribers are connected to networkand able to communicate through over 4,50,000 towers. The Indian tower industrycame into existence in the year 2000. This is the year when Department ofTelecommunications (DoT) of Government of India laid down the broad frameworkfor infrastructure sharing and  invitedapplications for IP-I registration. As per the registration certificate of IP-Iwhich states “Registered IP-I to establish and maintain assets such as darkfibre, Right of Way, Duct Space and Towers for the purpose to grant onlease/rent/sale basis to the Licensees of Telecom Services licensed undersection 4 of Indian Telegraph Act, 1885”. However initially the concept ofsharing was limited only to barters or swaps among the mobile serviceproviders. The first tower sharing breakthrough happened in 2005 when operatorSpice approached Quippo, the equipment leasing firm of SREI, to start buildingthe first independent infrastructure: 50 towers in Punjab, to be paid for by arental fee for tenants, the first of which would be Spice. Thus the concept ofinfrastructure sharing had caught on and the tower industry has not looked backever since.
Bharti Airtel carved its own towerco, Bharti Infratel in late 2006.Bharti Airtel also partnered with Hutchison and Idea to set up their owntowerco by pooling their existing tower assets. Indus Towers, the world’s firstjoint venture towerco was conceived in 2006, and had a major impact from2007-08, with 70,000 towers from day one. Reliance hived off assets into theirown 100% owned towerco Reliance Infratel, while Tata Teleservices hived offtheir assets into 100% owned WTTIL. However, WTTIL invited the participation ofanother towerco to manage and run the entity; Quippo bid for and won the rightsto merge their 13,000 towers. The Tata-Quippo joint venture portfolio grew to18,000 towers, and would later become Viom Networks. Another independent playerin the Indian market, Ascend Telecom, formerly known as Aster Infrastructure,is backed by private equity company New Silk Route and was incorporated in2002. Ascend merged with India Telecom Infra (ITIL), a joint venture betweenTVS Interconnect Systems (TVSICS) and Infrastructure Leasing and FinancingServices (ILFS) in 2011. The first international and independent towerco,American Tower Corporation, entered the Indian market in 2009 with theacquisition of XCEL Telecom with its 1,730 towers, and Transcend Infrastructurewith its 327 towers. This was followed by the acquisition of Essar Telecom’s4,450 towers in 2010, which gave American Tower a considerable footprint inIndia which it has continued to expand through organic and inorganic growth. Thecancellation of 122 licenses in 2012 had put the telecom industry in India on astand-still mode with lot of uncertainty, the tower industry also faced a hugebrunt with companies like us facing loss of tenancies. This event resulted inhiatus in any M&A or consolidation activity in Tower Industry until 2017.

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