See tower tenancy doubling in 3 yrs: GTL Infrastructure

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See tower tenancy doubling in 3 yrs: GTL Infrastructure

Telecoms tower operator GTL Infrastructure is in talks with new operators to rent out towers and expects per tower tenancy to more than double in three years, its top official said on Friday.

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Telecoms tower operator GTL Infrastructure is in talks with new operators to rent out towers and expects per tower tenancy to more than double in three years, its top official said on Friday.

GTL has a tenancy of about 1.17 tenants per tower, which is expected to rise to 2.4 in the next three years, Chairman Manoj Tirodkar said. Rival Indus Towers, India's biggest tower firm with more than 100,000 telecom towers, has an average 1.7 tenants per tower. "We are already in talks with new operators. At this moment 10 operators are our customers and we will be able to sign on new operators very soon," Manoj Tirodkar told the Reuters Trading India chatroom.

GTL Infra on Thursday said it has agreed to buy mobile firm Aircel's telecom towers for $1.8 billion, thus adding 17,500 towers to its existing 14,500. It will also build another 20,000 towers, which will be leased to Aircel.

"There is demand from both existing and new telecom operators," he said.

Mobile operators in India, the world's fastest growing market with monthly signings of new users at more than 14 million, are looking to cut costs by sourcing telecom masts from independent tower firms.

"The (telecom) industry is likely to be dominated by real issues like operations and management costs and energy management reduction and RF (radio frequency) planning challenges," he said.

Two new mobile firms such as Telenor and STel have recently started operations and couple more including Etisalat are preparing to launch, suggesting rising demand for telecom infrastructure.

India is also planning to auction third-generation (3G) and Broadband Wireless Access (BWA) spectrum, which should further increase the demand for mobile towers. Companies would need deeper network infrastructure to provide services such as high-speed Internet and video downloads.

"We anticipate need for at least 200,000 additional tenancies, more towers in urban areas," Tirodkar said. He said 3G auction is a "huge positive" for companies like GTL Infra.

A price war among mobile operators to grab users at a faster pace than rivals has reduced their margins and there are concerns that some of the new operators are going slow on expanding to the nook and corner of a vast geography like India.

Top mobile operator Bharti Airtel's Director Akhil Gupta said in October the company was reducing capex for its tower unit by a third to $700 million as tenants had scaled back on expansion.

But Tirodkar said GTL Infra's tenant inflow had almost doubled in the last three months, though the company is cautious on fresh investments on towers.

"We are extremely careful on committing fresh capex unless we have anchor tenant and sharing potential," he said.