Indus Towers, Bharti Infratel rationalising rates for telcos

MUMBAI: Telecom tower renters Indus Towers and Bharti Infratel are freezing annual rent escalation on their towers for Bharti Airtel in many locations, while Idea Cellular's rent will continue to rise till it is on par with what the market leader is paying, said a person close to development. This is part of Indus' move to rationalise rates such that every operator on each tower pays the same rent.

Indus’ move comes after operators raised concerns that tower companies were charging differentially between competitors for the same location. Indus is a joint venture between Bharti Airtel, Vodafone India, who have 42% stake each, and Idea Cellular, which holds the remaining 16%. The two telecom tower companies will also increase the starting rental on each tower for new tenants in keeping with prevailing rates, the person said.

So, if the tower companies were offering a new tenancy at `30,000 per month this financial year, next year the rate will become Rs 30,750 and rise proportionately each year.

This may put a spanner in negotiations by telcos – especially new ones -for discount on more tenancies. Reliance Jio Infocomm had spoken to Indus Towers and American Tower Corp. for a contract of 35,000 towers cumulatively, but WITH discounts. “We hope to fine tune and finalisze the above changes within this quarter,” Akhil Gupta, chairman, Bharti Infratel, said in a call to investors. Bharti Infratel is the telecom tower unit of Bharti Airtel, India’s no. 1carrier.

Since then, deals have been signed and the process is now complete, said a senior official at a top telecom operator. “Right now and going forward, that base rate itself will start escalating, irrespective whether there is a tenancy at that rate or not,” said Harjeet Kohli, group treasurer, Bharti Infratel had said in the investor call. Bharti Infratel and Indus Towers declined to comment. Mails to shareholding operators went unanswered.