Lesser Towers; Wider Operations
In a bid to capture a larger pie in telecom infrastructure, GTL Infrastructure Ltd will develop 6,700 shared towers by March 2008, at a cost of Rs 2,030 crore. The company has already inked a deal with Spice and Idea for shared infrastructure projects. Each tower would accommodate three to four operators.
Reliance Communications and Hutch are the other major players in this field.
Vikas Arora, VP, marketing, GTL, notes, “Sensitive installations such as defence, ports, railway and regulatory authorities do not permit construction of towers. Shared towers are the only option for such areas. However, with the union ministry’s aim to reach the mobile penetration to the rural areas, operators will have to share towers. It will give them a competitive edge.”
Since ARPU is at 0.002 dollars in India, sharing infrastructure is an option to lower costs. It will work on an anchor tenant basis, and fees would be paid in the form of rentals. However, the rent to be charged would be decided later.
Prakash Ranjalkar, chief operating officer, GTL & director, says that the company will raise equity to suit the project requirements. It has Rs 1,000 crore in the bank - Rs 320 crore equity and Rs 700 crore debts. He adds, “We are willing to raise money and look at equity partners.”
He informs that GTL is planning to acquire 10,000 existing towers at a cost of Rs 800-Rs 900 crore. “At present, these towers do no have a sharing capacity. We are working on strategies for those and would disclose details at a later stage.”
Andrew Seybold an analyst with Andrew Seybold Group LLC has identified data voice as the current rage. He says, “India stands next to US in the usage of data voice. Indians spend 451 minutes on data voice versus Hong Kong that spends 407 minutes. The US spends 789 voice minutes over telephone.”
“The split ratio between voice data ARPUs is 73:27. I expect the model to follow in India. At present, India has the lowest ARPUs at 0.002 dollars,” adds Seybold.
According to G.Venkatesh, CTO, Sasken, “Telecom players need to work on a long term strategy for voice based offerings,” he adds.
On November 2, Reliance Communications approved a scheme for transfer of existing wireless towers to a 100% subsidiary.
Anil Ambani, chairman, ADAG in a press statement said, “This is the first of a series of initiatives we will be taking to remain asset-light, and enhance our competitiveness, ultimately leading to unlocking of further value for the benefit of our nearly 2 million shareholders.”
The Board approved the scheme to accelerating wireless subscriber growth in India; increase geographic coverage, particularly in less dense regions, creating the need for setting up substantial new towers infrastructure and increase network capacity requirements to sustain additional users and higher Minutes of Use (MoU).
The company is also considering creating opportunities for tower sharing and co-location, with up to 6 tenants per tower.
Officials inform that the company plans to build 10,000 towers in the next one year. It has already signed with Idea and Hutch for infrastructure sharing.
It may be recalled that the Telecom Authority of India had on November 29 issued a consultation paper on infrastructure sharing.
Nripendra Misra, chairman, TRAI, said in the paper,” The capital costs for creating new infrastructures are formidable. It is estimated that 60% roll-out cost of a mobile service is towards setting up of passive infrastructure and only 40% contributes towards active infrastructure / electronics. Therefore, passive infrastructure sharing among mobile service providers assumes crucial importance, as it allows more than one service provider to leverage and ride on common infrastructure.”
The paper stated that total number of subscribers by Oct 2006 is 176.78 millions with wireless subscribers contributing 136 million. India had over 100 million mobile subscribers in May 2006 and adds approximately 5 to 6 million subscribers per month.
Infrastructure sharing is equally relevant to the urban areas also, it noted. Here, the presence of 6 to 8 service providers and a fast exploding mobile subscriber base is resulting in more cell-sites being put up by each service provider to cater to the growing traffic requirements. This mars the landscape because of the large number of towers disturbing the aesthetic look of the city.
It observed the growing mobile subscriber base is putting immense pressure on the scarce resources of spectrum, infrastructure and interconnection. As of today, lack of point of interconnect is a critical bottleneck hampering the expansion of telecom service. It is also adversely impacting the quality of service parameters of all the service providers.
Infrastructure sharing can also promote greater service-based competition and reduce infrastructure duplication.
- RJio Strikes Again: Telcos' Fight Is Consumers' Gain
- Weekly Rewind: Top 10 Stories On CXO Today -(Mar 20-25)
- 4G Feature Phones Set To Dominate India's Mobile Landscape
- Telecom War Intensifies As Airtel Buys Tikona's 4G Biz
- Vodafone-Idea Merger: What's Next In India's Telecom Consolidation?
- CEOs Struggle With Social Media Engagement: Study
- Micromax To Launch 4G VoLTE Feature Phone
- Is It Curtains For Brand RCom Post Aircel Merger?
- Google, RJio Working On An Affordable 4G Smartphone: Report
- RJio Partners With Cisco, Samsung For Speedy 5G Deployment