While the battle for mobile spectrum between Airtel and Reliance is still on, Bharti Airtel has quietly joined hands with Vodafone India and Idea Cellular to form Indus Towers to share telecom infrastructure. Indus Towers will be an independent entity that will provide passive infrastructure services on a non-discriminatory basis in India to all operators and other wireless service providers, including broadcasters and broadband services providers. It will operate in 16 circles.
Lets see what this joint venture means for each of these entities. Airtel and Vodafone are under increasing pressure on usage of existing spectrum more responsibly though Vodafone is tight lipped in the controversy. I spoke to one of the Nokia-Siemens network engineer and his opinion was they can easily double the number of towers without requiring any additional spectrum to accommodate more subscribers. [This is in Karnataka Circle – Category A for GSM segment] Out of the 16 circles in which Indus Towers operates, Airtel and Vodafone have max spectrum in 4 circles while Idea has in only 3. This means even if Bharti Airtel were to lose its appeal in the High Court of Delhi and TDSAT, Indus Towers will start deploying more towers to accommodate more subscribers which Bharti and Vodafone can utilize at the cost of Idea Cellular because it still doesn’t have license nor the spectrum to operate in all the 16 circles.
If you are an investor, do not look into the valuations these tower companies get because its mere infrastructure company, look at the subscriber numbers, ARPU and growth rate of Telcos. Going by the disruptive school of thought, forget Telecom Tower companies, even Telcos with spectrum are worthless, if the government opens its eyes towards competition and innovation and force them to open networks for other businesses. Recommendations in my next post 🙂
Very dep study on the happenings .I would like to receive mre on this .