Spice Comm inks Rs 250-crore deal with Israeli co

KOLKATA: This could ring in a new chapter in telecom infrastructure management. — the emerging business of building and managing ‘passive’ cellular infrastructure for the country’s top wireless service providers.

Israel’s TowerVision has just closed a Rs 250-crore telecom infrastructure management deal with BK Modi’s Spice Communications, in which Telekom Malaysia with a 49% stake is principal foreign shareholder.

ModiCorp Global owns 51% of Spice. TowerVision is promoted by Israel-based telecom services and products player, the Elgadcom Group, and by the London-based $20bn fund, Ashmore Investment Management.

TowerVision has been present in India since July ’05 when it started a techno-financial mobilisation and formally launched its Indian operations in January ’06 after receiving FIPB approval. The company also holds a DoT-issued infrastructure provider (IP-1) licence.

Under the terms of the deal, TowerVision India, a 100% arm of Tower Vision of Israel, will construct and manage 1,000-odd towers. The towers will be rolled out of TowerVision’s Gurgaon unit. Mobile towers constitute the non-electronic or ‘passive’ part of core cellular network infrastructure.

It is on these towers that electronic components like the base stations/ transreceivers sit to facilitate mobile communications. TowerVision India CEO Amit Ganani confirmed the deal. “We have just inked a Rs 250-crore deal with Spice Communications to build and lease out 1,000 towers.

TowerVision will construct the towers and lease them to Spice’s twin circles in Punjab and Karnataka. We are in the process of negotiating with other cellular operators for similar arrangements,” he told ET. Spice Communications director Dilip Modi said, “We are aggressively pursuing infrastructure-sharing arrangements in the telecom business.

And Spice would like to partner with an internationally renowned mobile tower management firm like Israel’s TowerVision. At some point, telecom companies need to take a call on what business to focus on and what to outsource in order to expand networks in a cost effective manner.”

The deal comes at a point when Union IT & communications minister Dayanidhi Maran is aggressively rooting for sharing mobile infrastructure among operators nationally. The concept of leasing out telecom towers has caught on globally. The leading player in this business is American Towers, with TowerVison placed second.

Mr Ganani said: “Given the massive network expansion plans of cellular operators, we expect there will be an immediate requirement to build an additional 1 lakh cellular towers across India to tackle to address the issue of multi-network congestion, especially at a stage when the subscriber base is growing exponentially across circles.”

At present, the cost of a passive tower is typically in the Rs 10-20 lakh range, depending on whether it’s ground-based or roof top. Elevation of the tower is also influences the final price of a mobile tower in a particular neighbourhood.