Sunil Mittal-led Bharti Airtel Ltd is looking at hiving off its 40,000 odd telecom towers from its main telecommunications business thorough one or more special purpose vehicles, company officials say.
American Towers, the US-based company that has declared its intention to invest in the towers business in India, owns only 14,000 sites worldwide. Industry sources say that globally the value of a company owning 40,000 towers could be as much as $10 billion (Rs 45,000 crore).
Brokerage Motilal Oswal had pegged Bharti’s estimated net assets at Rs 24,797 crore at the end of March, 2007. Telecom service companies hive off their towers in order to take passive assets out of the company’s balance sheet.
A company owning the towers can survive as an independent entity by letting all telecom operators share the tower assets and earn revenues from such rentals.
Industry sources said that Bharti is in talks with foreign majors as well as Indian companies to form a joint venture. It is also considering the option of forming multiple joint ventures, dividing up the towers region-wise.
The sources said that Bharti Airtel is considering all kinds of options for releasing the value from its population of towers, which is the highest in India.
While GTL Infrastructure is one of the Indian companies that Bharti is talking to, the Delhi-based group is also talking to some foreign players such as American Towers and Mauritius-based IMIL.
Both the foreign companies have applied for approval of the Foreign Investment promotion Board to invest in the business of telecom towers in India.
Reliance Communications, which has around 15,000 towers, has already announced its plans to hive of these assets and enter into a strategic partnership with American Towers. The Essar group, which is a joint venture partner in Hutch Essar, has also floated a company to manage its towers.
Industry sources said that the foreign companies that are showing an interest in India were looking at acquiring majority control or even 100 per cent ownership of the telecom assets of Indian service companies.
However, the telecom companies are also not keen to give up control of these assets at this stage, even as they open up these assets for sharing by other telecom companies. The service companies want to remain invested in these companies for some more time.