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Tata Tele sells tower business
Mar 19, 2010 (The Economic Times - McClatchy-Tribune Information Services via COMTEX) --
MUMBAI, India -- Tata Teleservices (Maharashtra) on Wednesday announced the sale of its tower business to Quippo-Wireless TT Info Services, a joint venture between the Tatas and Srei group, at an enterprise value of Rs 1,318 crore. The business -- which totals 2,535 towers in Mumbai, Maharashtra and Goa -- was under 21st Century Infra Tele Ltd, a wholly owned subsidiary of Tata Tele Maharashtra.
Quippo Wireless TT Info Services' CEO Arun Kapur said the deal would consolidate its portfolio to more than 38,000 towers and the highest tenancy ratio of over two. For Tata Tele (Maharashtra), the transaction allows it to focus on its core business area of voice and data.
"Over Rs 900 crore cash inflow from this transaction will support our ambitious investment and growth plans," said Tata Teleservices (Maharashtra) MD Mukund Govind Rajan. Each tower of Tata Tele Maharashtra has been valued at Rs 52 lakh.
Earlier this year, GTL Infrastructure acquired the telecom tower assets of Aircel for Rs 8,400 crore. Now with Tata Tele Maharashtra's towers, Quippo-Wireless has become the world's largest independent telecom tower company, pipping GTL Infra's portfolio of about 32,500 towers.
In January 2009, the Tatas and Srei group merged their tower assets to form Quippo Wireless TT Info Services. The Srei group holds about 49 percent stake in the company. Mobile service operators have been selling their towers to pure-play tower companies.
The tower companies are also expected to benefit after the launch of 3G and WiMax, the auctions for which would be conducted soon. Quippo Wireless' director Sunil Kanoria said with a modest beginning in 2005, the company is now the world's largest independent telecom infrastructure player. During this period, Quippo snapped up 1,000 towers from Spice and then merged it with the Tatas to create a 51:49 joint venture, and then signed a tower sharing agreement with Unitech Telenor. Although Tatas hold a majority stake in Quippo Wireless, Srei has management control.
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