Tower Companies Look To New Public Infra Projects For Revenue Growth

Telecom tower companies see public infrastructure projects becoming a growing proportion of their revenue in the future. With the ongoing consolidation in the telecom industry, tower companies face declining revenue from large telecom operators that are looking to cut costs.

Speaking on the sidelines of the launch of a Public Private Partnership (PPP) project between the New Delhi Municipal Corporation (NDMC) and Indus Towers, Bimal Dayal, CEO of Indus Towers said on M onday that public infrastructure projects will play a growing role in the company’s future.

“My take is that such smart poles and such initiatives will pop up in every city. We are very keen to replicate it. We are engaged in multiple cities and the response we are getting is quite phenomenal.” said Dayal speaking about the launch of 55 smart poles that will provide Wi-Fi Access, live CCTV monitoring, LED Lighting and air quality information.

The tower industry is facing a decline in tenancy ratios due ongoing consolidation in the telecom industry. Tenancy ratio refers to the number of tenants or operators that have set up active infrastructure including antennae per tower.

On the possibility of future decline in tower tenancy due to the merger between Vodafone and Idea, Dayal said, “It is true that when two companies merge you will see some kind of network reorientation. But I don’t see the demand going down. What will happen is a newer stream and set of towers or radiating points would emerge”.

Director general of industry lobby group Towers and Infrastructure Provider’s Association (TAPAI), Tilak Raj Dua said that tenancy would decline in the short term but was bullish about new opportunities.

“In the short term, though current consolidation may have some impact on tenancy ratio. However, we firmly believe that in the next 1-2 years with the growing data needs tower companies will have future business opportunities such as in-building solutions, Small cells, public Wi-Fi, fibre and new tower sites etc. which will lead to significant hike in tenancy ratio,” said Dua in an emailed response to ET’s queries.

The tower industry itself is seeing consolidation with Indus Tower set to merge with Bharti Infratel, which is awaiting regulatory approvals. The merged entity with over 163,000 towers across 22 sectors would be the largest tower operator in the world outside China. Besides this, American Tower Corp. has recently bought the standalone towers of Vodafone India and Idea Cellular, besides Viom Networks. – The Economic Times