Vodafone-Idea merger positive for tower companies: Bharti Infratel

KOLKATA: Bharti Infratel, the country’s sole listed telecom tower company, said Vodafone India-Idea Cellular merger will lead to a short-term rationalisation in tenancies, but a broader consolidation with the sector moving to a 4-5 operator scenario will be positive for tower operators. The “Vodafone-Idea merger, once it fructifies, will inevitably lead to short-term and one-time rationalisation of tenancies, but consolidation leading to a few but strong and willing participants is good for the tower industry in the medium to long term,” chairman Akhil Gupta said in the company’s annual report for 2016-17.

Any reduction in tower industry revenue on account of overlaps, he said, “would be more than offset by the exit charges as well as incremental revenue on account of rapid rollout by all operators”. Operators are already “strengthening their balance sheets by monetising passive infrastructure assets”, managing director DS Rawat said, citing the Reliance Infratel-Brookfield tower deal and Bharti Airtel’s own 10.3% stake sale in its tower arm to a consortium of KKR and CPP Investment Board.

According to Rawat, the telecom industry is moving towards a 4-5 operator scenario, which would result in financially strong operators with the ability and inclination for enhanced data networks.

Bharti Infratel expects smart city projects to prise open new revenue streams this financial year. Apart from robust data growth, the company expects new business this year from the government’s Digital India and smart city initiatives. “We won Bhopal Smart City (project) last year and are working towards successful delivery. Other smart cities are likely to consider it as a model, opening up revenue streams,” Rawat said.