Telecom Towers Business

Friends,

I am pasting the exact published on moneycontrol. Just to understand the readers what is it…..

Reliance Infratel and GTL are in talks for possible deal, sources told CNBC-TV18's Siddharth Zarabi. The deal may be announced shortly. The valuations are higher after the recent spectrum auctions.

When contacted, Reliance Communications and GTL refused to comment.

R-Comm has approved a move to restructure ownership of Reliance Infratel, its tower arm. The company said the move is to create the world’s largest independent tower firm. "The new company will not be owned or controlled by any telecom company. The consideration will be via stock and cash."

Sources said GTL and Reliance Infratel combine would have nearly 100,000 towers. GTL has 32,000 towers and is a widely held company. Reliance Infratel has 54,000 towers and plans to scale it up to 64,000 by year-end.

GTL acquired nearly 17,500 towers from Aircel earlier this year. At that time, the enterprise valuation Aircel’s tower business was around Rs 8,400 crore.

Add the 33,000-34,000 towers of GTL with Reliance Infratel and you are looking at close to 100,000 towers. This is close to what Indus Towers, which is a three-way joint venture between established GSM cellphone companies, has. That’s the kind of size we are looking at.

In terms of the valuation, sources said valuations have actually improved post the GTL-Aircel deal. This is on account of the fact that BWA and has 3G spectrum have been farmed out. All that will need more towers, especially the broadband wireless side.

Earlier today, CNBC-TV reported that Reliance Communications plans to demerge its tower business -- Reliance Infratel. The demerger, via a combination of cash and stock, will facilitate consolidation in the telecom space, enhance Reliance Communications' financial flexibility, and aid fast, low cost network rollout. The independence, neutrality of Reliance Infratel will aid 3G players and broadband wireless access companies.

My Comments

Number of towers GTL has 34000; this figure comes out as 16800 crores of telecom assets. Reliance Infratel is not a listed company but planning to scale its tower numbers to 64000. After a deal with GTL, reliance Infratel will have close to 1 Lakh towers and that is equivalent to number of towers possessed by all GSM operators in country.

So in telecom tower business as well, reliance Infratel wants to stand at par with all its peers. There might be demerger with RCOM later this year….. I am not confirming this news…. This will add value to TOP and BOTTOM line of RCOM…. Post merger GTL will gain heavily….

As MOU between ambani brothers has been dissolved and now they can come in business in any area… recently mukesh has bought infotel PAN India licenses at cost of 12500 crores Rs… Infotel is a company in Wired & wireless broadband… so Mukesh will be needing helping hand from someone who can provide him telecom infra…. Might be Anil is doing what exactly Mukesh wants…. Beneficiery companies will be reliance communication, GTL (a Dark Horse)…. Sujana Towers(my all time favourite)…. Now everyone should dig and find out other companies as well in tower business…. There is lot more to find out after reading this article.. readers can post their comments….