Bharti Airtel, Vodafone Essar and Idea Cellular formed Indus Towers Ltd, where the first two will hold 42 per cent stake each, while Idea will have 16 per cent.
Bharti, Vodafone and Idea form Indus Towers Ltd
NEW DELHI: In a global first, three large, competing mobile phone operators have pooled their signal tower assets, which, analysts say, can reduce capital expenditure and operating costs by as much as 60 per cent.
On Saturday, Bharti Airtel, Vodafone Essar and Idea Cellular formed Indus Towers Ltd, where the first two will hold 42 per cent stake each, while Idea will have 16 per cent. It is important to reduce cost because mobile telephony in India has become a commodity business — phone call rates are minimal, so large volumes or a huge number of subscribers are crucial to ensure profits.
The next wave of subscribers in India are in the rural areas and small towns. The phone call rates there have to fall further to impossibly lower levels if a company has to lure a large number of subscribers. This is where setting up of common infrastructure such as towers becomes beneficial.
Under the Indus deal, Bharti Infratel (the tower company of the Bharti group), Vodafone Essar and Idea will merge their existing passive infrastructure assets across 16 telecom circles in India — Delhi, Mumbai, Chennai, Kolkata, Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Punjab, Rajasthan, Tamil Nadu, UP (East), UP (West), and West Bengal.
‘Passive infrastructure’ assets include the base transceiving stations (BTS) that are put up on the towers. In all, there are 70,000 towers across 16 circles under Indus Towers. It is believed that the new tower company would cover only 16 circles as Vodafone Essar is present in only these. Bharti, on the other hand, offers services in all the 23 telecom circles in the country. Of the 16, Idea is commonly present in only 9, though it offers services in 11 circles.
The shareholding structure of Bharti Infratel, Vodafone Essar and Idea Cellular in the new tower company are proportionate to the number of towers they have across 16 circles.
The new tower company “would offer passive infrastructure services in India to all operators on a non-discriminatory basis,” according to a joint statement issued by Bharti, Vodafone and Idea. Besides GSM and CDMA (code division multiple access) mobile operators, Indus Towers also plans to offer its services to broadcasting and broadband players.
India now has 210 million phone subscribers and 1.2 lakh towers. Estimates are that by 2009-10, there will be around 4.07 lakh towers and 450 million mobile phone users.
m_nivedita@dnaindia.net
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