New Catalysts at Play

Burgeoning data growth, coupled with ongoing spectrum wins by operators, is creating the need for superior cellular coverage and hence improved tower densities

The country’s largest telecom tower company is at an inflection point, again. As telecom operators try to deepen their network to offer quality service, it stands to benefit from the ensuing business potential.

Indus has steadily been ramping up towers, which stood at around 120,000 across 15 circles by the close of fiscal 2016, while its tenancies grew a healthy rate of more than 12 percent to cross the 270,000 tenancies as compared to the previous year’s 242,000 tenancies.

The outlook looks fairly robust for three reasons. One, the acceleration in rollout of 4G services, thanks to the much-awaited entry of heavyweight Reliance Jio, is all set to intensify competition. Two, the call drop issue is leading service providers to respond with improved coverage. Three, the tower industry itself is in a consolidation mode and hence Indus must buckle up to ward off bigger competitors.

Recently, the industry saw its first big-ticket M&A between American Tower Corporation (ATC) and Viom Networks. The combined entity emerged as the second largest tower player, next to Indus. This should be an obvious prompt for Indus to beef up its towers base if it were to maintain the gap against the immediate competitor, which used to be Viom but now would be ATC.

The most immediate catalyst, however, is likely to come in the form of spectrum auctions, which are likely to make telecom operators embark upon a fresh rollout spree of 3G and 4G services.

The decade-old company, formed as a tripartite venture among Bharti Group, Vodafone India and Aditya Birla Telecom, has very much announced its intent to acquire sites to expand and meet anticipatory data services demand. It is reportedly in dialogue with municipal authorities to leverage city infrastructure sites like billboards, streetlight sites, and others. Some of these deliberations have already transpired. The fiscal saw Indus, along with Reliance Jio, forging a nineyear pact with Hyderabad Metro Rail to use the latter’s signal-towers at the entry and exit structures of all the 64 stations along the three metro corridors. The proposed deal would also enable improved access to mobile services for commuters.

During the fiscal gone by, Indus has also performed well on the greening front. It surpassed the telecom regulator’s recommended 33 percent green sites in urban areas. As on March 2016, 42 percent of all its portfolio complied with the green norms. During the fiscal, Indus brought 50,461 sites under its green initiative, up from 40,505 sites in FY 2015, which was a jump of 24.6 percent.

The move seems to be paying off well for the company, financially as well, given that energy costs comprise the lion’s share, of over 50 percent, of the total operating costs of a tower site. By eliminating the use of diesel, the company stands to benefit in long-term savings, besides enabling consumers to use a feel-good greener mobile network. Indus has also converted 200 sites into hybrid solar sites, as part of its ‘shut AC’ and ‘carbon reduction’ initiatives. These moves are also being helped by the fact that equipment makers are also developing green telecom technologies and leveraging innovative solutions like free cooling units and fast charging battery banks for reduction of carbon footprint.

After the big-ticket acquisition of Viom Networks, American Tower Corporation (ATC) and Viom combined entity emerged as the second largest tower player