The unexpected failure of 3G hit each and every stakeholder of the Indian telecommunications industry, and the telecom tower segment was no exception. Slower than expected offtake of 3G rollouts, and the delay in rolling out the BWA networks, even after a year of paying out the license fees, has forced the tower segment to display a reluctant performance.
3G rollout being limited to the top 40 cities in India and the primary focus being on upgrading and utilizing the existing infrastructure, has pulled the segment down. According to VOICE&DATA estimates, the telecom tower industry added a mere 7,213 towers in fiscal 2011-12 flat growth. The key players in the telecom tower business are Indus Towers, Bharti Infratel, Viom Networks, GTL, American Towers, BSNL, and MTNL.
Players
Maintaining its place at the #1 position is Indus. The company that has three anchor clients Bharti airtel, Vodafone, and Idea Cellular to its credit boasts of 109,114 towers. Indus Towers has coverage in 16 circles and healthy tenancy ratio of 1.94 has a high speed-to-market. With new operators rolling out services, the tower company is on a high-growth trajectory.
The company is also betting big on its green endeavor and testing wind power and gas solutions-be it piped natural gas, LPG solutions, and CNG based solutions. The company is developing biomass solutions for telecom towers. It seems that the company is planning to deploy all these solutions in large numbers in the near future and plans to be the largest green energy deployment in the world for the telecom vertical. To make this plan a reality, Indus has decided to invite proposals for setting up independent renewable energy companies, which will generate and supply green power to run towers.
Second on the chart is BSNL. This public firm having 61,340 towers in the country added another 1,179 towers in the last fiscal. It leased out 566 towers to other TSPs in 2011-12 and earned a revenue of `42.67 crore through the leasing. The company that has pan-India 3G licences however it did not majorly invest in terms of revenue, manpower and R&D and failed to make any strategic acquisitions as well.
Sharing of BSNL towers by other TSPs like Reliance, Idea, TTSL, airtel, and Vodafone etc, was not as per expectations. Moreover major TSPs hired towers from their own infra companies such as Indus, Bharti Infratel, Reliance Infratel, etc, and demand from these operators was hardly as expected.
The company is today re-looking at outsourcing the O&M activities of passive infra of towers on fixed charge basis (including EB and fuel charges) to the O&M agencies available in the industry with a mandate that the O&M agency will bear the capex for maintaining the passive infra for a period of 7-10 years after taking over the site.
From an operational perspective GTL is undertaking initiatives like energy management, network operations center, etc, through which the company aims to bring down the operational expenditure. Additionally it is also trying to address some of the supply chain challenges and generate further efficiency. The current investment is focussed on improving operating efficiency and taking care of its organic growth requirements. The firm also completed the acquisition of Aircel's telecom towers.
Viom, formerly QuippoWTTIL, boasts of 42,000 towers. During the last financial year the company registered a significant increase in tenancy ratio from 1.7x to 2.35x over the last 3 years.
