American Tower Corporation (ATC), one of the leading infrastructure providers engaged in the telecom space said that the Supreme Court verdict on the adjusted gross revenue (AGR) case gives “Vodafone some breathing room.” Tom Bartlett, president and CEO of ATC on Tuesday reflected on the Indian telecom space at the Goldman Sachs 29th Annual Communacopia Conference. Bartlett said that the company is “optimistic” about what it is seeing in the Indian telecom marketplace, having been in the market since 2007. ATC India is said to own and operate 78,000 tower sites across India with the company offering its services to “all major telecom service providers” in India.
AGR Verdict Provides “Some Visibility” to Indian Telecom Operators
Bartlett said that the Supreme Court verdict provides “some visibility” on how the telecom operators can “manage their cash flows going forward.”
The Supreme Court in early September, enabled telecom operators to pay up their AGR dues over a period of 10 years. It is reported that Vodafone Idea owes Rs 58,000 crores in AGR dues. Further, the Department of Telecom estimates that Bharti Airtel owes Rs 43,780 crores.
“I wish it were 30 years, but it's 10 years,” Bartlett said. “It gives Vodafone some breathing room, in terms of how they're going to be able to kind of manage their business, going forward.”
Bartlett also highlighted Vodafone's decision about “getting back into the market to raise capital.” The Vodafone Idea board in early September approved up to Rs 25,000 crore fund-raising plan through sales and debt.
Further, Bartlett said that the past seven months have demonstrated how “significant” wireless connectivity is to a market like India and “to bring it back to health.”
“The government itself is also looking at ways that it can be supportive to the wireless carriers,” he said. “They're trying to do as much as they can, in terms of lowering fees for spectrum, providing more spectrums, ensuring that they have the ability to raise pricing.”
However, Bartlett said that ATC has seen a lot of foreign investment flowing into the Indian marketplace demonstrating the “significance of the opportunity” in India.
“We're cautiously optimistic about being able to get back to those kinds of growth rates we've experienced in the past,” he said.
Indian Telecom Industry Has “Long Opportunity” for Growth
Bartlett said that the Indian telecom companies “are still investing into their networks” and that the “construct of the market” is “similar to the United States” with four carriers and “really three tower companies.”
“And with over 1 billion people and where the technology is and the amount of people that are still unconnected, we think that there's a long opportunity for growth,” he said.
Despite the growth opportunities, Bartlett said that company is “measured” in its investment approach towards the Indian telecom market.
“It's not like we're putting all of our eggs in one basket, but it is an emerging market where we do think that there's a really solid opportunity going forward,” he said.
The company in the Indian telecom space offers three major solutions to the telecom operators including a diverse array of towers, rooftops solution and distributed antenna systems. The company is also said to have its presence in over 20 countries with approximately 181,000 communication sites.
With the apex court delivering its verdict and providing some visibility for the telecom operators, Bartlett said that the company is constantly engaged with the telecom operators.
“All of our customers are looking for ways of ensuring that they've got capital to continue to reinvest in their networks,” Bartlett said. “And so, we're always looking with them in terms of, how best can we serve you, without giving anything up on our side.”
Further, Bartlett said that the company is also carrying out “day-to-day” dialogues on lease agreements.
“When we're looking at kind of the longer-term master lease agreements, particularly in the emerging markets, I mean, those are dialogues that go on, day-to-day,” he said. “And there could be certain opportunities to be able to amend some of these agreements that are able to meet both our customers' needs and our own.”
