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| Edited By: Amit Tripathi |Source: DNA |Updated: Mar 30, 2018, 02:20 AM IST
Reliance Communications on Thursday received an approval from the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO) to raise money for its tower business.
RCom’s tower arm Reliance Infratel Ltd received the regulator’s approval to raise about Rs 5,000 crore through an IPO to increase its current tally of 50,000 towers.
Reliance Infratel will offer 10% equity through a proposed issuance of 15.6 crore shares.
Reliance Infratel, in which RCom owns 95% and balance 5% is held by seven institutional investors, also has an optic backhaul infrastructure across 25,000 towns and 6 lakh villages.
The current tenancy ratio of Reliance Infratel towers is 2 and has a potential of 4 to 7 tenancy slots. In July 2009, Reliance Infratel signed a Rs 10,000 crore contract with another telecom player in India, Etisalat DB, to provide tower support for the latter’s operations in 15 circles. Inder Bajaj, president of Reliance Infratel, had then said that 30,000 of its 50,000 towers would be required to support Etisalat DB’s operations.
Revenue from tower-sharing is considered lucrative as incremental expense on the part of the provider is minimal.
Reliance Infratel has an average of four slots per tower and is currently using two slots on most sites for its CDMA and GSM networks.
The company claims it can increase the number of slots as and when required “with minimal capital expenditure.” Additionally, RCom’s own 3G and wireless broadband (Wimax) networks are expected to take up two slots more on each installation over the next 12 months.
