US firm ATC eyes stake in tower cos

NEW DELHI: American Tower Corporation (ATC) chairman and CEO James Taiclet on Tuesday said it was open to acquiring stakes in the tower arm of Indian telcos, setting up towers and even managing the infrastructure of companies here as part of its strategy to become an active player in the world’s fastest growing telecoms market.

Mr Taiclet said it had already initiated ‘introductory talks’ with several Indian telecom operators for possible alliances, but refused to give further details. ATC, the global telecom tower major, is also looking at Indian operators who can sell their complete infrastructure (100%) and then leaseback of towers, thus helping operators raise resources.

“We have substantial resources to put in the country,” Mr Taiclet said. “We are initiating conversations, serious ones, with all telecom operators in the country. We want to use our expertise to help them create a commercial collocation passive infrastructure business,” he added.

American Towers has already got the Foreign Investment Promotion Board’s permission to set up a 100% subsidiary in India.

Mr Taiclet pointed out that a neutral manager of telecom towers would be more amiable for sharing towers among different operators since this model would ensure that all players get a fair treatment. “The US experience has been that an independent tower company sites host approximately 2.5 times operators per tower when compared to 1.5 for operator owned sites,” he added.

ATC is one of the largest independent operators of communications sites with an enterprise value of over $23 billion. The company has over 22,000 towers, a bulk of which are in the United States, with the rest being in Mexico and Brazil. It also operates over 10,000 rooftop sites. According to Mr Taiclet, ATC has constructed over 8,000 towers and about 20% of all wireless traffic in the US is carried by it.

“We will soon open a regional HQ in New Delhi. A regional president will be announced shortly,” Mr Taiclet said.
Global tower companies such as ATC and Crown Castle are eyeing opportunities in the Indian market as all major telcos here—Bharti Airtel, Reliance Communications, Tata Teleservices and Idea Cellular—over the last couple of months have hived off their physical infrastructure in line with global practices.

The move, in addition to increasing operational efficiency, will also enable these companies to unlock value for its shareholders and also help them share towers.

Besides, the scale of infrastructure requirement over the next couple of years also brings huge opportunities for standalone tower companies. To put this is perspective, consider this: As per telecom regulator Trai, the country needs about 330,000 telecom towers by 2010 from about 110,000 currently to touch the projected 500 million subscriber base