Impacted by the ongoing consolidation in the Indian telecom sector, NYSE-listed American Tower Corporation (ATC) lost nearly 57,500 tenancies in India primarily due to the spate of exits by struggling mobile operators. The highest churn, for ATC, of 30,000 tenancies was from Tata Teleservices, which had sold its mobile business to Bharti Airtel in October last year.

The tower firm lost 10,000 tenancies from Aircel, which has closed down operations across six circle, and 7,500 from Vodafone India and Idea Cellular. The companies – Vodafone and Idea - had earlier proposed a merger and according to industry sources they were shutting down their overlapping sites.

Further, according to industry sources, ATC lost 5,000 tenancies each from Reliance Communications and Uninor. Prior to the consolidation in the industry, ATC’s total number of tenancies stood at 1.22 lakh.

The tower operator’s tenancy ratio also fell to 1.40 from the earlier 2.18. However, sources said company expects tenancies to rise after ATC completes the acquisition of 20,135 mobile towers held by Vodafone India and Idea Cellular. In November, ATC signed an agreement to acquire the telecom towers held by Vodafone India and Idea Cellular for about ₹7,850 crore.

The deal, which is expected to be completed in the first half of 2018, will consolidate ATC’s position as the second-largest telecom tower company with about 80,000 towers.

In an earnings conference in February, ATC said it expects carrier consolidation to last for next couple of years, with the number of carriers in the market expected to rationalise to three or four. The company said it anticipates total consolidation-driven annualised churn of about USD150-200 million over the course of the consolidation process.

“The temporarily elevated churn in India is expected to give way to more favourable structural framework and return to stronger growth in 2020 and beyond,” it added. – The Hindu Business Line


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