GTL Infrastructure is set to buy all the 17,500 cellular transmission towers of Aircel in a deal worth close to $1.8 billion, according to sources.
After the deal, the joined entity will become one of India’s largest third-party mobile tower companies with 33,000 telecom towers. Bharti Infratel, Crown Castle and Tata-Quippo had all expressed interest in the deal, but GTL managed to get ahead.
Aircel is expected to use the funds for expansion throughout India and bid for 3G license.
The announcement is expected tomorrow as GTL indicated to the BSE that its board is about to meet to discuss opportunities of ‘strategic acquisitions and investments’. The firm is also believed to be in talks with various banks to arrange funds for the deal.
Aircel Chief Executive Officer Gurdip Singh and Sundip Das, CEO of Maxis, which has a 74 per cent stake in Aircel declined to comment, while GTL Infrastructure’s whole-time director Prakash Ranjalkar said, “We are in talks but we cannot comment on the issue.”
Analysts believe that the deal is good for GTL as it marks the company’s’ re-entry into the big league of third-party tower companies and in any case, Aircel will be its assured tenant for using the towers.
In order to cut costs, most leading mobile service providers have sold their infrastructure or formed separate entities. The segment has seen many acquisitions starting with Bharti Airtel, Vodafone Essar and Idea Cellular collectively deciding to transfer all their towers to an independent firm called Indus Towers, which presently owns 100,000 towers. Second to that is Reliance Infratel with over 50,000 towers.
Among many acquisitions, Quippo bought 49 per cent of WTTIL, an infrastructure subsidiary of Tata Teleservices at Rs 30 lakh per tower. The American Tower Corporation purchased 325 towers from Transcend at Rs 29 lakh each and ATC bought 1,700 towers of Xcel Telcom each for Rs 50 lakh. Essar Telecom Infrastructure with its 4,500 towers is also in talks to sell it’s tower infrastructure.
The cost of building a tower from scratch is much higher when compared to the acquisition cost and it takes much extra time. Thus many independent tower companies look to acquire towers for expanding coverage.
The shares of GTL Infra rose almost 14 per cent to Rs 42.90 on Wednesday on BSE.