Telecom Towers & Infra consolidation continues – Reliance Infratel inks in deal with GTL Infra – 80,000+ tower company

The telecom towers business is into active consolidation and has already seen 5 significant deals in the recent past. The latest one is the largest of the kind and is between ADAG (Anil Ambani owned Reliance Group) and GTL.

ADAG’s mobile infrastructure company Reliance Infratel and GTL Infrastructure has agreed upon Rs. 50,000 crore deal, by which telecom towers of both these companies will be managed by a new entity which is neither owned nor controlled by any telecom operators. The telecom tower company thus formed would be one of the world’s largest tower asset company by tower numbers and values.

  

It is said, GTL Infrastructure would hold 33% stake and will be the largest shareholder in the proposed combined entity with Reliance Infratel. Anil Ambani’s stake in the entity, estimated to be around 26%, will be mostly in his personal capacity.

The combined entity will have over 80,000 towers (50,000+ from Reliance Infratel and 30,000+ from GTL Infra) and will be tower home to telecom operators like Reliance Communication (obvious), Aircel (because Aircel tower business was bought by GTL recently), Tata Teleservices and various other new players like Stel, MTs, Uninor, Videocon.

RCom has a debt of over 28,000 crore (including the latest 3G spectrum wining bid) and been a major worry for the company and its shareholders. To clear off its debt completely, the company has been on the active move. It is in talks with overseas Telecom majors to sell its 26% stake. Reliance Infratel deal and stake sale would help ADAG to complete shave off RCom’s debt.

But, the optic fibre assets which are currently under Reliance Infratel is not part of the deal and would go under RCom. ADAG is planning a different game with these assets which includes a optic fibre network of over 2,00,000 kms running throughout the country. It might be leasing out the network to wireless broadband spectrum winners to cash out its network assets.