Power Grid Corporation of India (PGCIL) is talking to big telecommunication players for renting out its transmission infrastructure for mobile towers.
Has about 2 lakh towers across the country
NEW DELHI: Power Grid Corporation of India (PGCIL) is talking to big telecommunication players for renting out its transmission infrastructure for mobile towers. PGCIL has about 2 lakh transmission towers in the country, out of which about 20% of are being put up for lease.
A senior PGCIL executive told DNA Money that the company was in discussions with Bharti Airtel, Tata Teleservices and Reliance Communications, among others. “We have not signed any contracts so far, but talks are going on through our offices in various states,” he said. Being a power transmission monolith, PGCIL has infrastructure across the country, linking even remote areas, through the power transmission grid.
The company believes its transmission towers can be used as mobile towers by addition of external equipment, without modifying their basic structure.
PGCIL plans to charge a rental for the space, while telecom companies will bear the cost of external equipment. “Transmission towers are being used world-over for creating wireless connectivity,” a PGCIL executive said, adding that there were no technical problems in such an arrangement.
India would have an estimated 42.5 crore mobile subscribers by 2010, creating a demand for 4.5 lakh base transmission stations, with major demand coming from rural areas. More than 70% of PGCIL towers are in rural areas, where penetration of mobile telephony is low.
PGCIL has also been leasing bandwidth from its 20,000 km optic fibre cable network to more than 60 customers, including telecom majors Bharat Sanchar Nigam Ltd, Videsh Sanchar Nigam Ltd, RComm, Bharti and Tata Tele.
But besides meeting demand, telecom companies are also looking at the towers as a business opportunity. After creating separate tower companies, telcos are diluting their stake in the newly formed entities.
Recently, a clutch of international investors picked up 11% in Bharti Infratel (the tower company of Bharti) for $1.25 billion. Before Bharti, RComm and Spice also took the divestment route for their respective tower companies. Tata Tele is believed to have short listed investors for its tower arm as well.
The PGCIL executive, on being asked whether it made sense for telecom majors to hire PGCIL towers rather than setting up their own, said, “Requirement of mobile towers is huge. Using our towers would be more cost-effective.”
Analysts Shankar K and Abhineet Anand at Edelweiss, however, are of the view that with companies like RComm and Bharti building their own mobile towers and leasing them to other operators, PGCIL may find it difficult to have a high tenancy ratio for its towers, at least initially.
The analysts say the company would be earning annual revenue of about Rs600 crore from its towers in about three to four years’ time, taking its total revenue from telecom business to over Rs800 crore.
jyoti_m@dnaindia.net
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