GTL Infrastructure buying Aircel Telecom Tower Business – More consolidation in Telecom Towers

Having already discussed about consolidation thats going to happen in the India Telecom Tower Businesses, the following news is no surprise for us. The new entrant to tower business, GTL Infrastructure informed the stock exchanges today that the company board will meet on Thursday for consideration of opportunities for strategic acquisition/ investments.The deal to acquire Aircel’s tower business for around $1.8 billion is expected to be announced tomorrow.

GTL Infra, backed by over Rs 5000 crores loan from State Bank of India (SBI), recently inked in a deal with the fast growing telecom network Aircel to buy out its tower business unit completely. With this deal, a complete buyout of Aircel’s tower business, GTL will become a significant independent player in the shared telecom infrastructure space. We did know, Aircel was trying to offload its tower business unit and was inviting offers from telelcom majors in the company. It was also known that Aircel tower business was contended by 3 parties – Quippo, Bharti infratel and GTL infra.

Now, it is almost certain that GTL Infra has snatched away the deal from other two rivals and likely to benefit in a big way. GTL Infra will become the second largest telecom tower firm with a portfolio of around 30,000. Where as, Tata-Quippo still remains the largest independent telecom infrastructure firm with 33,000 towers having tenancy of 2 and it is expected to reach 40,000 by end of the year.

With this deal, GTL Infra will not only boast a portfolio of 30,000 towers but also win the fast-expanding Aircel as its key customer. This buyout is similar to the Quippo merger deal with Tata Tele’s tower operations, through which the company substantially benefitted apart from getting key customers like Tata DoCoMo and Indicom.

Aircel is likely to use the money coming from the deal for its national expansion. With Aircel moving out for pan india reach and attaining faster growth, the company itself has become lucrative for other majors to buy out. Australia’s Telstra, France Telecom and AT&T were reportedly in the race to buy stake in Aircel which is emerging with a national footprint. So, we can expect more consolidation not only in Telecom tower business but also within the telecom providers.