An Inorganic Growth Chart
The Viom buyout strategically positions ATC to harness bigger growth opportunities at a time when operators look to rapidly scale up their data networks
In the telecom towers segment, ATC India has made inorganic growth a cornerstone of its expansion strategy so far. Since its India foray in 2007, the Boston-based ATC has gobbled up players that are small, mid and large. Now the country’s second largest towers company, ATC has achieved its current position purely by being an aggressive buyer and pulling off value accretive deals.
Its latest acquisition of Viom Networks is also its largest so far. Last year, it agreed to spend a sizeable Rs 5,800 crore to pick up a 51 percent stake in Viom. With over 42,000 towers in its fold, Viom was one of the leading tower players and had inked tower tenancy agreements with several telecom operators. ATC India had already owned and operated over 14,000 towers, so the combined entity with over 56,000 towers now easily translates into a $1 billion-plus business.
In the past, ATC had acquired the telecom tower assets of KEC International Ltd for Rs 81 crore. In 2009, it had acquired 1,700 towers of Xcel Telecom, followed by the acquisition of 400 towers from Kolkata-based tower company Transcend Infrastructure for nearly Rs 95 crore. Later in 2010, it acquired 4,630 towers from Essar Group for about Rs 2,000 crore. However, with Viom in its kitty, ATC India’s market share has vaulted from just about 2.3 percent in 2014 to over 14 percent now.
Its aggressive buyout strategy is not without a reason. There is an immediate need to accelerate rollouts of towers across various telecom circles for delivery of new services like 3G and 4G and telcos prefer to deal with larger players who can scale up faster.
However, in a post-acquisition development, Syed Safawi, the erstwhile CEO of Viom Networks, who had steered the company for nearly half-a-decade quit. The combined ATC entity is now being headed by Amit Sharma, who continues to oversee policy and integration activities.
ATC India sites house cellular and microwave communication equipment, and support the networks of almost all mobile service providers. The buyout comes during a phase when demand for mobile connectivity is exploding and operators are looking for more sites. To meet this demand, ATC India recently announced its plan to invest $2 billion over the next few years. The proposed capital could be used to widen its footprint by setting up more towers and stepping up the competition.
ATC India has started using green and renewable energy sources to power telecom towers as an alternative to diesel generators. It is setting up captive hybrid solar system at sites where diesel generators run for longer durations. This reduces diesel consumption and associated maintenance costs, besides helping to lower the carbon footprint.
To date, more than 450 sites in states of Bihar, Uttar Pradesh, Odisha and West Bengal have been installed with solar panels averaging 4.4 KWp. Going forward, the company will expand its solar energy program with the support of carriers to meet the regulatory requirements and minimize diesel consumption.
ATC India already owned and operated over 14,000 towers, and the combined entity with over 56,000 towers now translates into a $1 billion-plus business.