Bharti Infratel Says Vodafone-Idea Merger Will Lead Rationalisation in Tenancies, to Pursue Smart City Projects

Telecom tower firm Bharti Infratel stated that few strong participants are good for the tower industry in the long run and ongoing consolidation, especially Vodafone-Idea Cellular merger if completed, will inevitably lead to short-term and one-time rationalisation in tenancies.

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“However, we believe that the consolidation leading to few but strong and willing participants are good for the tower industry in medium to long term, the vis-à-vis large number of small or unwilling operators with no financial muscle or passion to invest in data network rollouts. In any event, we believe any reduction in revenue on account of the overlaps will be more than offset by the exit charges, as well as the incremental revenue on account of rapid rollouts by all operators,” Bharti Infratel Chairman Akhil Gupta said in the company’s annual report for 2016-17.

The year 2016-17 witnessed substantial network rollouts as evidenced by co-location additions of over 24,000 between Infratel and Indus and of 15,571 on a proportionate basis, which was the highest in the last five years. Total consolidated collocations as on March 31, 2017, were at 210,606, a co-location factor of 2.32 at closing.

“With broadband penetration still at under 20% and Government’s push for a digital economy, the prospects of mobile broadband in the country remain strong,” Gupta said.

Gupta said that the company is very well placed to capture a significant untapped potential for growth in telecom infrastructure, which would require large capital,” he said.

“We sustained our efforts to improve green footprint during the year and move towards more diesel free sites in the long-run,” Gupta said.

On a consolidated basis, over 38,900 towers or 43% of Bharti Infratel’s portfolio are green as of March 31, 2017.

During the year, the consortium led by Bharti Infratel has signed the Concession Agreement with Bhopal Smart City Development Co. Ltd. for implementing Smart City project. “We are now working towards a successful project delivery. We expect Bhopal Smart City to serve as a model for the Smart Cities initiative and expect other state governments to follow suit by way of Request for Proposal or RFPs. The project gives us a unique opportunity to experiment on several new opportunities, becoming available for infrastructure sharing like optic fibre rollout, small cells, IBS and Wi-Fi,” Gupta added.

The executive said that Bharti Infratel hopes to pursue these opportunities going forward and do more Smart City projects in future.

“We believe that with India now decisively embracing the ‘digital world’, the demand for data would grow exponentially in years to come. This augurs well, despite temporary setbacks, for telecom industry & thereby telecom infrastructure industry in the long term,” he said.

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