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Today, infrastructure sharing is hogging the limelight, thanks to Reliance Telecom Infrastructure (RTIL), a subsidiary of Reliance Communications. The company recently placed a 5% equity stake with a group of leading institutional investors across the US, Europe, and Asia for $337.5 mn, helping RTIL, which is valued at $6.75 bn. It is a big achievement considering the fact that RTIL's valuation is around 22.5% of Reliance Communications' valuation, ie, Rs 120,000 crore in July 2007. And, the company is eyeing a valuation of $9 bn for RTIL by March 2008.

With this announcement things have started moving on the infrastructure-sharing plank.

Idea has recently announced that its Board of Directors has decided to de-merge the passive infrastructure of the company into a wholly owned subsidiary, subject to all regulatory approvals. And, it is expected that within six months we might see the Idea subsidiary getting a complete go ahead for a separate subsidiary.

Bharti Infratel is one step ahead of Idea Cellular in this respect. Recently, a court-convened meeting of all the shareholders took place. "Things are on track and the whole de-merger process will be legally completed within two months," says Akhil Gupta, group managing director, Bharti Enterprises.

Tata Teleservices has floated a tender for commissioning of 3,000 new towers under infrastructure sharing in existing and new circles through shared platform, and is in the process of finalizing partners for the purpose. The company has already shortlisted partners and will soon take a call in this regard. Spice has already given orders to TowerVision India and Quipo Telecom Infrastructure (QTIL). Even BSNL has plans to share towers through the USO project for which work has already started. However, there are some operators who are still undecided, but are expected to take a final call this fiscal.

The huge numbers on the tower front is throwing up new opportunities for IP-1 (infrastructure provider-1) players. And, less the tower subsidiaries, the better it is for IP-1 players, as they can get more towers under their belt. It is good to know that lowering of Capex as well as Opex will help operators to focus more on marketing and customer services, which need a lot of attention from senior management. And, these services will get complicated once operator crosses 100 mn mobile connections by 2010.

On the IP-1 front, there is a long list of companies of which majority are Indian. There is also a mix of players focusing on pan-India operations and players with limited coverage. There are some who are early starters, and some others who are still studying the Indian market and chalking out strategies for the future. The IP-1 players focusing on India include GTL Infrastructure (GIL), Essar Telecom Infrastructure, QTIL, TowerVision, American Tower, XCEL Telecom, TVSICS, Aster Infrastructure, Independent Mobile Infrastructure (IMIL), and others. Of this majority have telecom turnkey or investor background, whereas only Aster Infrastructure comes from a manufacturing background.

The IP-1 Players
American Tower is one of the very late entrants in the country, though they have been a leader in owning and operating wireless and broadcast communication sites in North America. Recently, the company has set up a subsidiary in India. Worldwide, the company has a portfolio of over 22,000 communications sites of which 20,000 towers are in the US, and over 2,800 in Mexico and Brazil. In addition to these the company also offers access to over 10,000 rooftop and tower sites in the US that they manage for third parties.

Talking about India strategy, Amit Sharma, executive vice president, president-Asia, American Tower, says, "The focus is to acquire a small portfolio of towers for service providers, and to build nationwide marketing of towers whereby existing towers are managed by others. The company is focusing on countries where there is tremendous growth and multiple operators. Currently the focus is on SAARC, Vietnam, Malaysia, Indonesia, and the Philippines."

According to Prakash Ranjalkar, COO, GIL (operational in fourteen circles), the company is planning to close the fiscal with 6,700 sites, and plans are to add around 7,000 sites every year for the next two years. The company's strategy is to focus on geographies where no operator has any towers.

And, this gives them an edge over other IP-1 players. Apart from this, the company is also focusing on having 30% towers on a proactive basis, so that they can do their own radio planning and then approach operators for infrastructure sharing for that location, thereby providing increased coverage and quality to operators in those geographies.

Already operational in Punjab, Haryana, UP(E), UP(W), Karnataka, Madhya Pradesh, and Gujarat, QTIL has set up close to 1,500 towers and is now expanding services in Rajasthan, Andhra Pradesh, Bihar, West Bengal, Orissa, and Jharkhand. On the other hand, TVSICS is focusing on circles like Andhra Pradesh, Kerala, Gujarat, and Madhya Pradesh, and plans are for expanding to new circles like Rajasthan, Delhi, UP (E), and UP (W).

TVSICS is focusing on four circles of Andhra Pradesh, Kerala, Gujarat, Madhya Pradesh and planning to start services in another four circles soon. The company has already commissioned 100 sites and plans are to close the fiscal with 1,500 sites of which 300 will be proactive sites (sites where they will set up towers on their own and then populate it with operators).

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