Wireless Tata in the hunt for cash

Wireless Tata Telecom Infoservices, a tower firm jointly owned by Tata Teleservices and Quippo Telecom Infrastructure, is looking to raise capital to fund additional tower acquisitions.

The firm is bidding to purchase towers of a couple of telecom firms, including Aircel’s 11,500 towers, Sunil Kanoria, director Quipo, told DNA Money. “We aim to acquire 60,000 towers in two years. We have just placed the necessary documents as part of the bidding process for Aircel’s towers whose valuation is anywhere between $1.5 billion and to $2 billion. We are also talking to other firms for more towers,” said Kanoria.

On securing funds for the tower acquisitions, Kanoria said, “The funding organisations are ready. That is not an issue. Once the business makes sense to them, they are ready to fund any amount.”

Quipo, the telecom tower subsidiary of Kolkata-based Srei Infrastructure Finance, recently bought a 49% stake in Wireless Tata. It paid Rs 2,367 crore for a 30% stake and, for the remaining 19%, 5,000 towers were transferred to the venture.

“Wireless Tata has about 25,000 towers now,” said Kanoria. “The delay in the deal happened due to various procedures that we had to follow, like getting FIPB approval and various other government clearances,” he said.

A slew of private equity players have stake in Quipo. IDFC Private Equity holds 11.24%, Oman Investment Fund has 16.60%, and Srei and its various subsidiaries together hold a 55% stake. The Government of Singapore Investment Corp is another shareholder in the firm.

The tower business in India has taken off owing to the demand from new telecom players for towers to roll out telecom services. Analysts said for new telecom firms it makes sense to share towers rather than owning them by which huge capex is saved. The tower business has seen many telcos group together to pool in their towers and rent them to other telcos.

Among standalone tower firms, Indus Towers, a joint venture of Bharti Airtel, Vodafone Essar Ltd and Idea Cellular Ltd, is the largest owning 98,000
towers.

It is followed by Reliance Infratel Ltd with 48,000 towers. Public sector BSNL has 40,000 towers, while Bharti Infratel owns 28,078.