In March 2024 this post was deleted by Blogger. The reason I don't know. Therefore putting it for a review by Blogger Team.
As Indian telecom sector is going through the merger and acquisition - the consolidation of the mobile operators is pushing the consolidation of the passive infra providers, most specificly the tower firms. Apart from the carrier/operator's own tower companies there are several independent tower and infra providers in the market and these companies depend on the tenancy of the towers by small and mid sized telecom operators. Now as the consolidations are reshaping the market, it's obvious that the tenancy business is not working. And at the same time operators, burnt out by huge debt, plan for renting towers to cut down operational costs.
As Indian telecom sector is going through the merger and acquisition - the consolidation of the mobile operators is pushing the consolidation of the passive infra providers, most specificly the tower firms. Apart from the carrier/operator's own tower companies there are several independent tower and infra providers in the market and these companies depend on the tenancy of the towers by small and mid sized telecom operators. Now as the consolidations are reshaping the market, it's obvious that the tenancy business is not working. And at the same time operators, burnt out by huge debt, plan for renting towers to cut down operational costs.
While RCom is struggling to find a potential buyer, Airtel is calculating for ideal stake holdings. And Amercian Tower Corp, backed up by US dollar, is siphoning the remaining smaller players.
After Vodafone and Idea both announced to sell their own towers to ATC, it seems obvious that Indus Towers may be left in the hands of Bharti.
Indus Towers is the world's largest tower company with a presence of more than 1,20,000 towers across the country.
Indus Towers-Bharti Infratel merger is awaiting for nearly 2 years. Before merger the ownership details of Indus Towers as: Bharti Infratel 42%, Vodafone Plc 42%, Vodafone Idea Ltd 11.15%, Providence Equity Partners* (via its subsidiary P5 Asia Holding Investment (Mauritus) Ltd) 4.85%.
* Providence had invested in ABTL in 2008-09, and earlier invested in Idea Cellular for 15% stakes in 2006 (this stakes got diluted later due to fresh equity issues). It swapped its stake in in ABTL (Aditya Birla Telecom Ltd) to Indus Towers in 2016 and currently holds 4.85% stakes in Indus Towers.
In November '20 the much awaited merger of Indus & Bharti Infratel was done. Vodafone Idea (or simply Vi) has opted to leave the merged entity & will get Rs 3760 cr for its 11.15% share in Indus but there was some pending payment from Vi's side and that would be adjusted before final payment. Ownership details now is as follows: Bharti Airtel 36.7%, Vodafone Plc 28.12%, Providence 3.25%, PE firms KKR & Canada Pension Plan Investment Board (CPPIB) 7.1% and 25.2% would be held by Public.
The merged entity has overlapping operations in only four circles – Haryana, Uttar Pradesh (West), Uttar Pradesh (East), and Rajasthan.
Bharti
Infratel, Vodafone and Aditya Birla Telecom created a joint venture of
independent tower company – Indus Towers in November 2007. Bharti Infratel
holds 42% share in Indus Towers. It
has presence in 18 states/11 circles with approx 40,000 towers.
In
2007 private equity firms Kohlberg Kravis & Roberts (KKR), PE arm of Goldman Sachs and Singapore sovereign wealth fund
Temasek also invested in Bharti Infratel. Later they exited the joint
venture by 2015, 2014 and 2013 respectively.
In March 2017 KKR and Canada Pension Plan Investment Board
(CPPIB) had together bought 10.3% stake in Bharti Infratel. In October 2017 Bharti
Airtel sold off 4.49% share of Nettle Infrastructure Investments Ltd to different
private equity firms like Harris Insight Emerging Markets Fund and UBS Principal
Capital Asia Ltd.
As of now Bharti Airtel and its subsidiary Nettle Infrastructure Investments Limited (formerly 'Nettle Developers Limited') holds 53.51% stakes in Bharti Infratel. Remaining 46.45% holds public, and 0.04% holdings remain to Non-promoter non public.
In September 2020, Bharti Infratel's board members have approved the merger. Lenders to Vodafone Group Plc. also approves the merge in October.
It is expected that VIL will exit the new merged entity, and that will help to collect money to pay rest of AGR dues. Airtel and Vodafone Plc will remain as controller of the Indus Towers, and they also exit Indus.
Future
of Indus Towers and Bharti Infratel
As Vodafone India and Idea sold off their towers to ATC India, there is high chance the merged entity (or VIL or Vi) will sold off their shares to Bharti or any other companies.
As they exit from Indus Towers, Airtel may merge all of its towers under one
roof and then sell off stakes of merged entity.
Reliance Infratel
To
cut off debt of the company, the parent company ADAG (Anil Dhirubhai Ambani
Group) is trying hard to sell off the tower and fiber optic network business
but valuation difference did not make that happen.
In
December 2015 RCOM entered into talks with US-based investment firm Tillman
Global and TPG Asia for a majority stake sale but eventually the talk failed.
In
December 2016 RCOM had inked a deal with Canada based company Brookfield Asset
Management to sell off 51% stake of Reliance Infratel (remaining 49% will be
held by RCom). The merged entity was to be rebranded as TowerCom Infrastructure
Pvt Ltd.
However as the deal was getting approved at various level, RCom called off the merger with Aircel in beginning of October 2017 and also announced shut down of 2G/3G services in the last week of October. Soon after that Bookfield calls off the deal to buy Reliance Infratel probably on the ground of reduced tenancy per tower but informs that they are watching the situation.
However as the deal was getting approved at various level, RCom called off the merger with Aircel in beginning of October 2017 and also announced shut down of 2G/3G services in the last week of October. Soon after that Bookfield calls off the deal to buy Reliance Infratel probably on the ground of reduced tenancy per tower but informs that they are watching the situation.
As
soon as Brookfield called off, a group of companies expressed their interest to
buy 100% of Reliance Infratel. The list of companies include Indus Towers,
Bharti Infratel, Reliance Jio Infocomm, American Tower Corp, Sistema JSFC,
Tillman Global Holdings, TPG Capital, Carlyle Group, I-Squared Capital and
Gateway Partners.
American Tower
Corporation (ATC India)
Headquartered at Boston (Massachusetts, United States) ATC has international presence across Africa (Ghana, Nigeria, South Africa, Uganda), Europe (France, Germany), Latin America (Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Paraguay, Peru) and Asia (India).
HQ
at Delhi, ATC India was operational since 2007 and initially operating in Bihar
and Orissa. In 2009 ATC India acquired Xcel Telecom (owned by Texas-based multi-strategy hedge fund Q Investments Lp.)
in May and Transcend Infrastructure (owned by Singapore based Insight
Infrastructure) in November.
ATC
India acquired Essar Telecom Infrastructure Pvt Ltd (ETIPL) in February 2010
via wholly owned subsidiary – Transcend Infrastructure. ETIPL added approx
4,450 towers to ATC India.
Announced in Octber 2015, by April 2016 ATC India completes Viom transaction – 51% controlling stake in
Viom Networks. Viom added 42,000 towers to ATC India’s portfolio. This acquisition made
the SREI Infra to exit from Viom as they sold off entire stake of 18.5% to ATC.
Post ATC-Viom merger, ATC had 51% share in Viom Networks as Tata Group had 35%,
Macquarie SBI
Infrastructure Investments Pte and SBI Macquarie Infrastructure Trust hold 11%,
and IDFC Private Equity Fund had 3%. Viom-ATC merged entity was rebranded as ATC TIPL (ATC Telecom Infrastructure Pvt Ltd).
Development of Viom Networks : Kolkata based Kanoria
backed SREI Infrastructure’s Quippo Telecom Infrastructure (QTIL) was founded
in 2005 as independent telecom infrastructure company. During the process of growth QTIL acquired
Spice Telecom’s tower assets in 2008.
Tata Tele’s tower arm Wireless Tata Telecom Infrastructure Ltd
(WTTIL) was merged with Quippo Telecom Infrastructure (QTIL) in early 2009.
Quippo Infra was owned by Quippo Telecom (which was in turn owned by Government of Singapore Investment Corp,
IDFC Private Equity, Oman Investment Fund, DB Zwirn,
Macquarie SBI Infrastructure Ltd, Roaring Investments, Geraldton Finance, AMP
Capital and members of the Kanoria family.)
The merged entity retained their names as Quippo-WTTIL (as 49:51
share) and acquired Tata Tele Maharastra’s tower arm 21st Century Infra Tele (TFCITL) in March
2010. The merged entity was soon rebranded as Viom Networks (Tata Group holds
54% stake and SREI has 18% stake in Viom).
In
November 2017 ATC India cracked the deal to buy a total of 20,000 telecom
towers for total value of Rs 7850 crore from Vodafone India (Vodafone Tower
Holdings) and Idea Cellular (Idea Cellular Infrastructure Services Limited or
ICISL) separately via ATC Tower Infrastructure Pvt Ltd (ATC TIPL) as these two
operators are going to be merged very soon. Brookfield and IDFC Infra were also
in the race to buy but pulled out midway due to valuation issues.
ATC
India has presence in all 22 circles and has nearly 80,000 sites (post acquisition of Vodafone, Idea's towers). That's 3rd largest after Indus and Bharti Infratel.
In October 2018 Tata Tele wanted to sell half of its stake (26%) in ATC TIPL and IDFC to sell off its entire 2% stakes in ATC TIPL. Tata Tele was asked to pay one time settlement fee for the lease obligations as Tata Tele shut down its mobile service after merging mobile business with Bharti Airtel. ATC alredy have nearly 63% share in ATC TIPL, and now it will have 78%.
In April 2019 ATC announced acquisition of remaining 13% stakes of Tata Tele in ATC TIPL, and with this deal, ATC now holds nearly 90% shares in ATC TIPL, while Macquarie-controlled funds will have remaining 10%. CCEA approved the acquisition in November 2020.
In October 2018 Tata Tele wanted to sell half of its stake (26%) in ATC TIPL and IDFC to sell off its entire 2% stakes in ATC TIPL. Tata Tele was asked to pay one time settlement fee for the lease obligations as Tata Tele shut down its mobile service after merging mobile business with Bharti Airtel. ATC alredy have nearly 63% share in ATC TIPL, and now it will have 78%.
In April 2019 ATC announced acquisition of remaining 13% stakes of Tata Tele in ATC TIPL, and with this deal, ATC now holds nearly 90% shares in ATC TIPL, while Macquarie-controlled funds will have remaining 10%. CCEA approved the acquisition in November 2020.
Deal
for Vodafone-Idea Towers was Cruicial for ATC India
ATC
India banks on the towers they received from Viom Networks which has good
tenancy ration but mostly are Tata Tele or Telenor – which are to be merge with
Airtel sooner or later, which does not mean that these tenancy will be
continued or not when Airtel has investments in two different companies.
GTL Infrastructure - http://www.gtlinfra.com/
In
2010 GTL Infra acquired 17500 towers from Aircel Cellular via its wholly own
subsidiary Chennai Network Infrastructure Limited (CNIL).
GTL
Infra has approx 28000 towers in 22 telecom circles.
Tower Vision - http://www.tower-vision.com/
It
operates in 16 circles, has approx 8000 towers.
In
2013 ATC tried to buy it, but went successful. In 2014 Jio had made a deal with Tower Vision
for using their towers for 4G roll out.
In
2016, Bharti Infratel had shown interest to acquire Tower Vision, however it
didn’t materialize.
Ascend Telecom
Infrastructure http://ascendtele.com
In
2011 Ascend Telecom acquired India
Telecom Infra Limited (ITIL), which was owned by Infrastructure Leasing and Financial Services
(IL&FS) and south-based TVS group's TVS Interconnect Systems.
In
April 2017 IDFC Alternatives
(the PE arm of IDFC Group) invested for 33% stake in Ascend Telecom
Infrastructure.
Apart from these 7 tower companies, Indian has a few of companies those are presence in tower market, like : state owned BSNL
Apart from these 7 tower companies, Indian has a few of companies those are presence in tower market, like : state owned BSNL
TAIPA (Tower and
Infrastructure Providers Association) – formed in 2011
Members:
Indus Towers, ATC, GTL Infrastructure, Tower Vision, Bharti Infratel, Reliance
Infratel
Defunct:
Independent
Mobile Infrastructure (IMIL) was founded in 2005 by Jide
J. Zeitlin, former Goldman Sachs investment banker. IMIL shut down by anytime
between 2009-2010. No more details were found.
Timeline of India’s tower biz:
- Reliance India Mobile was the first operator in the country who understood the importance of creating a separate infrastructure company – in 2001 Reliance Telecom Infrastructure Limited was founded to take care the towers, OFC and related assets of the company.
- Aster Infrastructure was founded in 2002.
- Global Group entered into tower biz with GTL Infra in 2004.
- In 2005 Independent Mobile Infrastructure (IMIL) was founded. (later shut down in 2009-10)
- In 2005 Kolkata based Kanoria Group backed SREI Infra ventured into tower biz via Quippo Telecom Infrastructure.
- In 2006 Tower Vision and Xcel Telecom entered into tower business.
- Delhi headquartered American Tower Corporation India started operations in India in 2007 starting from Bihar and Orissa.
- In 2007 Transcend Infrastructure was founded in Kolkata.
- In July 2007 Bharti Airtel demerge their tower business as Bharti Infratel.
- In November 2007 Bharti Infratel (42%), Vodafone India (42%) and Idea Cellular (16%) founded Indus Towers – the largest tower company in the world with more than 1.2 lakh towers.
- In 2008 Quippo bought of Spice Telecom’s towers.
- Reliance Telecom Infrastructure Limited was rebranded as Reliance Infratel in 2008. (in 2005 Reliance empire was divided between two brothers and since then Reliance’s telecom business was headed by Anil Ambani and rebranded as Reliance Communication or RCOM).
- In 2009 Vodafone created a new company Ortus Infratel Holdings to invest in Indus Towers.
- In May 2009 ATC India acquired Xcel Telecom.
- In November 2009 ATC India acquired Transcend Infrastructure.
- In 2009 Tata Tele’s tower arm Wireless Tata Telecom Infrastructure Ltd (WTTIL) merged with Quippo.
- In February 2010 ATC India bought Essar Telecom Infrastructure Ltd (ETIL).
- In March 2010 Quippo-WTTIL bought of Tata Tele (Maharastra)’s tower company 21st Century Infra Tele (TFCITL).
- In 2010 Quippo-WTTIL was rebranded as Viom Networks (Tata had 54% and SREI had 18%)
- GTL Infra bought towers of Aircel in 2010.
- In 2010 Aster Infra rebranded as Ascend Infrastructure.
- In 2011 Ascend Infra acquired India Telecom Infra Limited (ITIL).
- In 2011 TAIPA (Tower And Infrastructure Providers Association) was formed.
- In December 2015 debt-ridden RCom initiated talk with Tillman Global and TPG Asia for selling of Reliance Infratel, but failed.
- In April 2016 ATC India bought 51% share in Viom Networks. SREI group exited from tower biz. ATC-Viom merged entity was rebranded as ATC TIPL.
- In December 2016 RCom went into a deal with Canada based Brookfield Asset Management to sell of 51% stake of Reliance Infratel. The new entity would be branded as Towercom Infrastructure.
- In March 2017 Idea and Vodafone announced the merger and therefore they planned to sell out the standalone towers to third party.
- In September 2017 government of India made a plan to hive off BSNL's towers into a seperate entity to be owned by public sector enterprise.
- In the last week of October 2017 Brookfield stepped aside from the deal to buy off majority stake in R-Infra.
- In November 2017 ATC Telecom Infrastructure Pvt. Ltd announced acquisition of a total of 20,000 towers from Vodafone Tower Holdings and Idea Cellular Infrastructure Services Ltd (ICISL) separately. (These towers are not from Indus Towers)
- Jio agreed to buy towers from Reliance Infratel along with some spectrum and other wireless assets (December 2017).
- In January 2018 ATC applied to DoT to merge its Indian subsidiaries and invest another $ 1.2 billion.
- In March 2018 ATC completed merger of its 5 Indian subsidiaries (ATC India Tower Corp Pvt Ltd, ATC Tower Co. of India Pvt Ltd, McCoy Developers Pvt Ltd, Transcend Infrastructure Pvt Ltd, ATC Telecom Tower Corp Pvt Ltd) into ATC Telecom Infrastructure Pvt Ltd (ATC TIPL)
- April 2018 Vodafone completed sale of their standalone 10,200 towers to ATC for Rs 3850 Cr.
- In the middle of May 2018 Bharti Airtel has proposed a merger of Bharti Infratel and Indus Towers. The merged entity will be named as Indus Towers with 1,63,000 towers across 22 telecom circles of the country and with valuation of $ 14.6 billion (Rs 965000cr). That will be 2nd largest tower company after China Tower.
- In end of May 2018 Idea Cellular completed the sale of their standalone 9,900 towers to ATC at Rs 4,000 crore.
- In October 2018, Tata sold 13% stakes and IDFC sold its total stakes in ATC TIPL to ATC.
- In March 2019 Reliance Jio spined off its fiber and tower assets into two seperate infrastructure investment trusts (InvITs) - Jio Digital Fibre Pvt Ltd (JDFPL) and Reliance Jio Infratel Pvt Ltd. (RJIPL). RJIPL is owned by Reliance Industrial Investments and Holdings Ltd (51%) and RIL (49%). Jio Infratel had 45000 towers from Reliance Infratel (of RCom), and remaining 1,25,000 - 1,30,000 built by them. However many of them, nearly 25% of these towers are monopole, i.e. not suitable for tenants. Jio has target to built up 2,60,000 towers in next 6-12 months.
- In April 2019 Tata Tele sold off remaining 13% stake to ATC. ATC will have 90% share in ATC TIPL now.
- In June 2019 it has been heard that a consortium led by Brookfield Asset Management will buy Jio Infratel with 1,70,000 towers portfolio.
- In July 20, 2019 it has been disclosed that Canada's Brookfield Infrastructure Partners L.P. and its affiliates will buy Jio Infratel, tower arm of Jio in multi-phases. The investment value is Rs 25,215 crore ($3.66 billion).
- In September 2019, it has been known that Indus Towers and Bharti Infratel is in final stages of merger. Post merger Bharti, Vodafone India and Birla backed Idea Cellular will cut down stakes in the entity. Experts assume that Sunil Mittal backed Bharti may also leave tower biz in a phased manner, in a longer time period. It's been in news that ATC and Brookfield are also eyeing for stakes in Indus+Bharti Infratel merged biz.
- In December 2019 GIC (Singapore's sovereign wealth fund) and a group of investors including Brookfield Infrastructure Partners LP announced acquistion of Jio's tower assets of nearly 1,35,000 towers for Rs 25,200 crore. Government approval came in September 2020.
- Bharti Infratel & Indus Towers got merged on Nov 21, 2020. Vi will sell out its stake in the merged entity.
- Nov 26, 2020: Cabinet Committee on Economic Affairs (CCEA) approves that ATC can buy out Tata Group's 12.32% share in ATC India's subsidiary ATC TIPL. ATC would be spending Rs 2480 cr to mark Tata Group's exit from tower biz.
- By end of 2020 Brookfield-acquired Jio Infratel was rebranded as Summit Digitel.
- September 2021, TAIPA rebranded as DIPA (Digital Infrastructure Providers Association).
For latest update: visit here
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