A slew of strategic initiatives are on in the tower business space
The tower business in the telecom space is buzzing almost with an equal bass and treble effect as that of the spectrum rows right now. In December last year, Airtel’s tower arm, Bharti Infratel sold 9% stake for $1 billion, to Singapore’s Temasek led consortium, taking the total valuation of the company to a whopping $10 billion. A couple of days before the Bharti tower sale deal, Spice Communications also sold as many as 600 towers to Quipo Telecom for Rs.6 billion and in August 2007, RCOM sold 5% for $337 million in its tower subsidiary, escalating the value of RCOM’s tower business to $7 billion. The obvious reason is to unlock value.
The spectrum tangle still persists, but interestingly, to make substantial cost savings both in capital & operational expenditure, even bitter adversaries are turning bedfellows, with respect to the tower business. As per RCOM’s estimates, a new cell site will ensure capex and opex saving of 30% and 3036% respectively & an existing site will result in savings of 10% & 1518% correspondingly. Recently, Bharti Airtel, Vodafone & Idea Cellular announced plans to jointly form an independent tower company called Indus Tower. As per a statement by Vodafone, “The primary benefit will be accelerated expansion of coverage, especially into rural areas, and wider access to affordable services for all”.
While telecom giants are divesting stakes in tower companies to rake in the moolah, they also understand that while rivalry is necessary to keep the competitive spirit going, as far as the tower business is concerned, collaboration seems to be the most viable option.
For Complete IIPM Article, Click on IIPM ArticleThe tower business in the telecom space is buzzing almost with an equal bass and treble effect as that of the spectrum rows right now. In December last year, Airtel’s tower arm, Bharti Infratel sold 9% stake for $1 billion, to Singapore’s Temasek led consortium, taking the total valuation of the company to a whopping $10 billion. A couple of days before the Bharti tower sale deal, Spice Communications also sold as many as 600 towers to Quipo Telecom for Rs.6 billion and in August 2007, RCOM sold 5% for $337 million in its tower subsidiary, escalating the value of RCOM’s tower business to $7 billion. The obvious reason is to unlock value.
The spectrum tangle still persists, but interestingly, to make substantial cost savings both in capital & operational expenditure, even bitter adversaries are turning bedfellows, with respect to the tower business. As per RCOM’s estimates, a new cell site will ensure capex and opex saving of 30% and 3036% respectively & an existing site will result in savings of 10% & 1518% correspondingly. Recently, Bharti Airtel, Vodafone & Idea Cellular announced plans to jointly form an independent tower company called Indus Tower. As per a statement by Vodafone, “The primary benefit will be accelerated expansion of coverage, especially into rural areas, and wider access to affordable services for all”.
While telecom giants are divesting stakes in tower companies to rake in the moolah, they also understand that while rivalry is necessary to keep the competitive spirit going, as far as the tower business is concerned, collaboration seems to be the most viable option.
Source : IIPM Editorial, 2008
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