Indivision, Acme Telepower in JV
The Future group’s private equity fund, Indivision, and Delhi-based Acme Telepower are forming a tower management joint venture company, Acme Tower.
NEW DELHI: In what could be the first instance of a PE fund setting up a company, the Future group’s private equity fund, Indivision, and Delhi-based Acme Telepower are forming a tower management joint venture company, Acme Tower. In addition, an Indivision-led consortium is likely to pick up equity in the main company — Acme Telepower. The deal size is estimated to be $150 million.
Acme’s move to enter the business of managing towers comes at time when numerous other Indian companies are betting on big revenues from telecom infrastructure. Besides, the Department of Telecom had recently short-listed Acme Telepower along with 20 other companies including Ericsson, Quipo Telecom, GTL Infrastructure, ITI, Spanco Telesystems, TCIL, Acme Telepower, RailTel and TVS ICS, for setting up passive cellular infrastructure in rural areas with support from the Universal Services Obligation (USO) Fund.
When contacted, Kapil Kathwalia, chief executive officer, Acme Telpower declined to comment. The Indivision-led consortium’s investment in Acme Telepower is likely to be completed this month. “The process is on and is likely to be completed by mid-December,” a source told ET. In fact, Acme is seen as an attractive investment from the PE firms’ viewpoint taking into account its explosive growth over the last three years. Its revenues have grown from Rs 30 lakh in 2003 to over Rs 200 crore in 2005-06. As per industry estimates, the company is on track to post revenues of Rs 1,500 crore with profits between Rs 400-450 crore for FY07.
Tower management companies provide passive infrastructure to telecom service providers — these include overseeing the operations of the tower, its maintenance, providing security, electricity back-up and other emergency back-ups. This sector offers ample scope for growth as India’s tele-density of just 16%. It is estimated that the country may need close to 1,80,000 telecom towers over next year. Currently, all service providers combined together have about 86,000 towers. Acme Tower’s primary competitors in this space will be TowerCo, a wholly owned subsidiary of Reliance Communications and other stand-alone tower management companies like Quipo Telecom Infrastructure, TVS Interconnect Systems, GTL Infrastructure and the Essar group. Acme Telepower manufactures Power Interface Unit (PIU).
Acme’s move to enter the business of managing towers comes at time when numerous other Indian companies are betting on big revenues from telecom infrastructure. Besides, the Department of Telecom had recently short-listed Acme Telepower along with 20 other companies including Ericsson, Quipo Telecom, GTL Infrastructure, ITI, Spanco Telesystems, TCIL, Acme Telepower, RailTel and TVS ICS, for setting up passive cellular infrastructure in rural areas with support from the Universal Services Obligation (USO) Fund.
When contacted, Kapil Kathwalia, chief executive officer, Acme Telpower declined to comment. The Indivision-led consortium’s investment in Acme Telepower is likely to be completed this month. “The process is on and is likely to be completed by mid-December,” a source told ET. In fact, Acme is seen as an attractive investment from the PE firms’ viewpoint taking into account its explosive growth over the last three years. Its revenues have grown from Rs 30 lakh in 2003 to over Rs 200 crore in 2005-06. As per industry estimates, the company is on track to post revenues of Rs 1,500 crore with profits between Rs 400-450 crore for FY07.
Tower management companies provide passive infrastructure to telecom service providers — these include overseeing the operations of the tower, its maintenance, providing security, electricity back-up and other emergency back-ups. This sector offers ample scope for growth as India’s tele-density of just 16%. It is estimated that the country may need close to 1,80,000 telecom towers over next year. Currently, all service providers combined together have about 86,000 towers. Acme Tower’s primary competitors in this space will be TowerCo, a wholly owned subsidiary of Reliance Communications and other stand-alone tower management companies like Quipo Telecom Infrastructure, TVS Interconnect Systems, GTL Infrastructure and the Essar group. Acme Telepower manufactures Power Interface Unit (PIU).
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