India Broadband Forum

shirish · 01-07-09, 10:30 AM

Quote:

MUMBAI: The telecom tower industry in India seems to be heading for a capacity glut. The sector will close this fiscal with over 2,50,000 towers
owned by operators and stand-alone firms. With companies having aggressive tower rollout targets for years ahead, India could end up with more number of towers than required. The telecom regulator Trai has said the industry requires 3,00,000 towers by FY11.

The over-capacity situation will not only lead to longer pay-back periods for tower companies, but will also trigger consolidation in the sector. Also, tower companies will have to lower the rentals amid fierce competition, feel analysts.

The announcement of merger of Quippo Telecom Infrastructure with Tata Teleservices’ tower arm alludes to significantly falling valuations in the sector. “Capacity creation has risen much ahead of the aggregate minutes of usage (MoU), putting pressures on incremental margins,” Acsendia Consulting principal analyst Alok Shende told ET.

“We are likely to see two parallel but mutually contradicting trends. With the advent of 3G services and increasing MoU in the urban markets, we are likely to see good growth in utilisation, fresh investments and rentals. But rentals and utilisation in the low population density rural markets are likely to remainunder pressure for the next 2-3 years,” he added.

Indus Towers, the joint venture between Bharti Airtel, Vodafone Essar and Idea Cellular is expected to have 95,000 towers by March this year while the figures for Bharti’s tower arm Bharti Infratel is 27,000 and for Reliance Infratel is 48,000. Besides this, Vodafone has 5,000 towers (ex-Indus), BSNL 39,000, Tata-Quippo joint venture 18,000 and GTL Infrastructure is targeting 10,000 towers by fiscal-end. This takes the total count to 2,43,000 and excludes those owned by MTNL, Idea, Aircel and tower firms like Excel and Essar Telecom Infrastructure.

“As far as capacity is concerned, the sector will have more than it may require. There is going to be consolidation. Only those companies that have tenancy ratios of two and above will be profitable. In the meantime, rentals will have to take a hit,” Angel Broking analyst (telecom & IT) Harit Shah said.

Companies, however, have big expansion plans going forward. While Tata-Quippo is looking at a portfolio of 50,000 towers by 2012, GTL is eyeing 25,000 towers by 2011. Indus is learnt to be adding 3,000-4,0000 towers every month. By March 2010, RCOM wants to expand tower infrastructure to over 70,000 multi-tenancy towers, each capable of supporting four or more operators.

“But the big question is where is the demand going to come from. While new operators like Unitech and Swan Telecom are readying to roll out operations, they will not be able to make a big difference to the demand-supply situation in the sector. Also viability of these new players is still questionable,” said another analyst.

This is from today's Economic Times.

prasannaganesh · 01-07-09, 10:44 AM

thanks for the info.
keep posting.

mickey · 01-09-09, 02:51 PM

buddy pls try to keep the posts small...

just4kix · 01-09-09, 04:31 PM

Hello mail2sc, You must really know the forum rules and policies (stated and otherwise).

In any forum, when posting a news item, it is expected that you will cut paste the entire story and then at the bottom (or beginning) post the URL or name of the source.

There is nothing wrong in a long post.

01-09-09, 04:31 PM	#4
just4kix Platinum Member Join Date: Dec 2007 Location: Pune Posts: 8,899 Blog Entries: 6 Rep Power: 19	Hello mail2sc, You must really know the forum rules and policies (stated and otherwise). In any forum, when posting a news item, it is expected that you will cut paste the entire story and then at the bottom (or beginning) post the URL or name of the source. There is nothing wrong in a long post. __________________ * Never argue with an idiot * To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts. \| To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts. \| To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts. -------------------------------------------------------------------------------------------

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India Broadband Forum

Towering Problem: India to end this fiscal with 2,50,000 towers

Towering Problem: India to end this fiscal with 2,50,000 towers

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01-07-09, 10:44 AM	#2
prasannaganesh Silver Member Join Date: Nov 2008 Location: Chennai,Thiruvottriyur Age: 24 Posts: 338 Rep Power: 2	thanks for the info. keep posting.

01-09-09, 02:51 PM	#3
mickey Senior Member & Mod Join Date: Jan 2009 Location: Delhi Posts: 3,303 Blog Entries: 3 Rep Power: 8	buddy pls try to keep the posts small...