Tuesday January 6, 02:43 AM

Source: Indian Express Finance

Tata Tele, Quippo merge tower businesses

By ENS Economic Bureau
Tata Teleservices Limited and Quippo Telecom Infrastructure Limited, promoted by the Kanorias of SREI Infrastructure Finance Limited, have decided to merge their passive infrastructure businesses to create India s second largest telecom tower company with an enterprise valuation of Rs 13,000 crore ($ 2.6 billion). As per the terms of the partnership, Quippo telecom would hold 49 per cent in the new entity, while Tata Teleservices s Wireless-TT Info-Services Ltd (WTTIL) would hold the remaining. Despite a low stake, Quippo would control the management. Quippo Telecom would have to pay Rs 2,400 crore cash upfront for 30 per cent stake in WTTIL, while it would transfer 5,000 towers to the new company for the remaining 19 per cent stake. The combined entity will, therefore, have a portfolio of over 18,000 towers, thereby making it the second largest independently managed tower firm in India. Indus Towers, which is a tripartite independent venture between Bharti Airtel (BHARTIARTL.BO : 283.65 +2.65), Idea and Vodafone Essar, after merging their individual infrastructure assets in 16 telecom circles in India leads the pack with 70,000 towers. The deal is of strategic importance and value enhancing for all stakeholders-particularly so since it combines the proven expertise of management and operational capabilities of QTIL with the committed support of TTSL, said Tata Tele MD Anil Sardana. Arun Kapur, MD of Quippo Telecom, said, This tower company will organically grow into an entity with over 50,000 towers by year 2012. We are confident it will hold the largest tenancy ratio in the Indian telecom space as well. The joint entity will invest about Rs 2,000 crore in 2009-10 to build 8,000-10,000 towers.