Indus Towers, India's largest telecom tower company, is gearing up to seize the opportunity presented by the ongoing 5G rollout in the country. Despite the delay in near-term dividend payouts, Indus Towers has affirmed that it will not hold back on capital expenditure for the current fiscal year to expand its tower network and take advantage of the emerging revenue growth opportunity. Its executives view the 5G rollouts by Airtel and Jio as a "now or never" opportunity that could generate cash flows for the next decade for its tower business, said an ET report.
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Indus Towers has estimated that the 5G loading, or the mounting of 5G network equipment on its existing tower sites, will drive around 5-10% growth in monthly average rent per tenant going forward. With the average weight of the 5G radio equipment on towers dropping to 18-20 kg from as high as 40 kg, it can easily accommodate those along with the existing gear at its sites and, in turn, boost the loading revenue.
Indus Towers' annual capital expenditure increased almost 41% YoY in the last fiscal year to Rs 4,121 crore, and it is expected to grow at a faster pace in the ongoing fiscal year, particularly to cater to the needs of India's top telcos as they scale up their nationwide 5G rollouts. Airtel and Jio have already rolled out 5G services in more than 3,000 cities or towns, respectively, and Vi has not yet announced its 5G rollout timelines.
Indus Towers' executives, including Managing Director Prachur Sah and Chief Operating Officer Tejinder Kalra, believe that there will be no slowdown in 5G network expansion anytime soon amid surging data consumption, which bodes well for the tower company. They are committed to growth as this is something that will keep the business healthy for a very long time, given that it is an annuity business where missing out now may result in missed opportunities forever.