Major competition was felt coming from small and regional players who lacked the scale and the geographic spread, but were competitive enough in terms of pricing.

The telecom tower market has grown rapidly in the last 4-5 years, in-line with the growth of wireless telecom subscribers. The telecom tower industry in India has witnessed many a changes in all these years, the major ones being'the introduction of tower-sharing concept, and the emergence of independent tower leasing companies like Indus, Quippo, WTTIL, Excel, and ATC. Further, the industry went into a consolidation mode in the last one year with mergers of Quippo-WTTIL and ATC-Excel.

As for the market size, there are no official estimates with regards to the size and growth rate of telecom tower market in India. Some industry estimates peg the total number of telecom towers at around 200,000 as on December 2008, which is expected to grow to 350,000 by the end of 2012. During the next one year, industry is likely to see an addition of 40,000-45,000 telecom towers. Particular to our business, i.e., telecom infrastructure roll-out services, the corresponding market size is estimated at Rs. 4,000-5,000 crore presently.

On how infrastructure sharing can affect the growth of the market

Sharing of passive infrastructure reduces the lead time for new operators to commence service offerings to end-consumers, since the cumbersome and time-consuming process of infrastructure set-up is not required. This leads to the growth of telecom market in general by way of wider choice for consumers to choose the service provider from. Also, setting-up or creation of passive infrastructure is a capital intensive proposition and hence, infrastructure sharing helps telecom operators stay asset-light and helps them focus on core activities like branding, marketing, and distribution.

On the impact 3G technology on the telecom towers market

3G technology would provide incremental opportunities for more towers to be installed. In the initial period, the additional roll-out is expected to be more concentrated in urban areas. However, with increase in affordability and acceptability of high speed data services among the mass market (semi-rural and rural) would fuel the telecom towers roll-outs in other parts as well.

On how the slowdown has affected the market

There are not many concerns for the turnkey services companies (like‚ Nu Tek) in terms of business opportunities and sagging economy, but one common challenge witnessed across the industry was an increase in competition. Major competition was felt coming from small and regional players who lacked the scale and the geographic spread, but were competitive enough in terms of pricing. This situation resulted in pricing pressure and hence, the declining margins. However, the industry had a big relief by way of business opportunities that are available on the back of positive industry prospects.

On the key challenges faced by the telecom towers vendors in India

Presently, the industry is plagued with time delays on account of getting multiple approvals (like registration with sales tax department, labor department, works contract, shop and establishments, etc.) from different government authorities/departments. Obtaining such approvals for each state/circle is a lengthy and cumbersome process. The government should take necessary steps and introduce regulations such as uniform sales tax across the country and single window clearance for various approvals. Such initiatives would help in the deployment of telecom infrastructure (tower site) in an efficient and speedy manner, and result in lower administrative and logistics costs.