Indian Telecom Networks Are Ill Equipped: ATC

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Tom Bartlett, president and CEO of American Tower Corporation (ATC) in the earnings call on Thursday said that the Indian telecom networks are ill equipped to handle 4G levels of traffic for more than billion people. The company had earlier reported the second quarter financial results for the period ended June 30, 2020 with ATC recording an 1.2% increase in its total revenues to US$1,913 million. ATC said that its property revenue increased 2.4% to US$1,893 million while its net income increased 3.2% to US$448 million for the period ended June 30, 2020.

ATC Operates Over 75,000 Tower Sites in India

Bartlett said that the ATC has invested over US$5 billion in India and that the “market structure” in India “is now more rational.”

“We believe the wireless industry has now completed a much needed and long awaited consolidation to enable the deployment of 4G technology throughout the country by the remaining carriers,” Bartlett said in the earnings call.

ATC is said to own or operate over 75,000 tower sites throughout India that are used by various telecom operators including Vodafone Idea, Reliance Jio, Bharti Airtel and BSNL.

“More recently, there have been pricing increases by all of the carriers in the marketplace, while the telecom regulator has indicated that it intends to be supportive of the carriers to rational spectrum policies and the Indian government continues to stress its Digital India initiative,” Bartlett said.

However, Bartlett said that the crucial near-term issue “that needs to get sorted out in the marketplace” revolves around the Supreme Court decision on the adjusted gross revenue (AGR) matter. The Supreme Court of India is soon expected to make a decision on AGR payment issue particularly on the timeline as to when the telecom operators can clear the dues.

“The Indian consumer has proven to have a tremendous appetite for mobile data with average smartphone usage per customer of well 10-gigabits per month, even before the impacts of COVID-19,” Bartlett said.

Crucially, Bartlett said that the majority of the wireless users in India are using legacy technologies over 4G networks and that the networks are ill equipped to handle current loads of traffic.

“To get those networks ready, we continue to believe that significant levels of incremental network spending are necessary accompanied by material level of network densification,” Bartlett said.

ATC Expects Delayed Payments from Vodafone Idea Over AGR Issue

It was also highlighted on the earnings call that ATC have factored in approximately US$65 million in “additional bad debt assumptions” for its full financial year.

“This is primarily attributable to the expected timing of payments from the government owned carrier BSNL, as well as the possibility that Vodafone Idea future payments become interrupted or delayed as they weigh a final outcome of the ongoing AGR court proceedings in India,” Rod Smith, executive VP, CFO of ATC, said in the earnings call.

Crucially, Bartlett said that the company expects Vodafone Idea to continue its operations in India.

“I mean the government has definitely advocated for having three strong players in the marketplace,” he said. “They’ve made some sizable good base installments, as best I can tell in terms of what is owed in the marketplace. They are aggressively trying to restructure to save cost and compete in the marketplace.”

Bartlett highlighted that ATC are working with Vodafone Idea over the payments “as we would be working with any customer who is going through a similar situation.”

“But kind of given the direction of the government, given what we are seeing in the marketplace, again we remain optimistic and cautiously optimistic about their ability to continue and to grow,” Bartlett said.

The company said that it remains optimistic about the Indian telecom market and that India recorded “double digits” growth for ATC.

“Carrier spending continues to be strong, building out their networks,” Bartlett said. “They continue to make the network investments to support the overall usage demands.”

It was also highlighted in the earnings call that the ATC is continuing to expand its presence in India through the Digital Village program that provides internet access to unconnected villages. The company is said to have connected over 150 villages with “more in development.”

“We are proud to be making a difference in the areas of digital literacy, e-learning, tower help, as well as providing enhanced access to career opportunities in many rural Indian communities,” Bartlett said.

Reported By


Born in India, Yogesh loves to travel and has lived in multiple countries including New Zealand and Canada. His bylines can be found on various newspapers and blogs throughout the world, including Vancouver Sun, Surrey Now-Leader, Daily Hive , Investing News Network and Rach F1.

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