Telecom, Telecoms sector, Vodafone , GTL Infrastructure, MTNL,
India's position as the fastest growing wireless market in the world has attracted several global players such as UK's Vodafone Plc, Japan's NTT DoCoMo and UAE's Emirates Telecommunications Corp (Etisalat).
"Under the current circumstances, when competition is so severe at operators' end, the tower companies have to become much more efficient," said Ravi Sharma, executive chairman of industry body CMAI Association of India.
"They will only survive, provided they have more than three tenants per tower," he said. "Now to get to that, there will be consolidation amongst companies."
Earlier this month, two sources had told Reuters that GTL Infrastructure Ltd was leading the race to buy the tower holdings of Aircel, the Indian unit of Malaysia's Maxis, in a deal valued at $1.6 billion to $1.7 billion.
Private equity firm New Silk Route, which owns a stake in tower leasing firm Aster Infrastructure, is reportedly in talks with Essar Telecom Infrastructure to buy a stake in the latter.
The consolidation spree was kicked off in 2007 when India's top mobile operator Bharti Airtel, Vodafone Essar and Idea Cellular decided to pool their resources and hived off their towers into an independent firm, Indus Towers.
In January, Tata Teleservices agreed to sell a 49 percent stake in its telecoms tower arm to Quippo Telecom Infrastructure. Quippo, in which India's SREI Infrastructure and Government of Singapore Investment Corp own stakes, paid 24 billion rupees and transferred 5,000 towers to the merged entity.
In March, Boston-based American Tower Corp agreed to acquire unlisted Indian telecom tower firm Xcel Telecom.
"Sharing is profitable for everyone," said J Gopal, executive director (Mumbai circle) of state-run Mahanagar Telephone Nigam Ltd. "Consolidation will definitely help in reducing costs and increasing penetration."
RISING DEMAND
India added a record 16.7 million mobile users in October, upsetting the trend of 10 to 12 million average monthly additions seen till then. The newer users are coming in from smaller cities, or what are termed 'B' and 'C' circles, industry players said.
"Companies are also looking at entering into B and C centres, as metros are getting more and more saturated," said Manish Dixit, Frost & Sullivan's analyst, Information & Communication Technology Practice, South Asia and Middle East.
"However, putting up towers in these circles is costly as many issues like lack of continuous power supply hamper operations," Dixit said. "In order to sustain and survive, they need to form a cartel or enter into strategic alliances for their rural foray."
In two years, India's tower slot demand may rise to over 700,000 from 320,000 now, as demand from existing and new 2G operators rises and operators begin rolling out 3G and WiMax services, Inder Bajaj, Reliance Infratel's president said on a call recently.
For a table on the number of towers, click on [nBOM526360].
(Editing by Sunil Nair)
(For more news on Reuters Money visit http://www.reutersmoney.in)
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