In 2007, India hosted about 100,000 telecom towers, considerably less than the current tower count of 450,000-500,000. Over the past seven years, operators and independent tower companies have built an average of 50,000 new towers per year and, as a result, telecom coverage now extends to 90% of the Indian territory.
From 2010 to 2012, dozens of new mobile network operators entered the Indian market attracted by its growth potential and frivolous license regime. In the meantime, towercos kept themselves busy building thousands of towers every year. However, fierce competition among carriers, often relying on cut-throat offers to attract subscribers, forced several players to exit the Indian market. In 2012 the highly publicised cancellation of 122 telecom licenses, wiping out many smaller players and stalled launches, forced the restructuring of the Indian MNO market.
To date, India has more telecom towers than China (420,000) and 800 million mobile connections. A broad range of tenancy ratios can be found in India. While residual operator-captive assets account for many single tenant towers, many of the larger towercos boast healthy tenancy ratios such as Viom Networks’ 2.2, Bharti Infratel’s 2.01, GTL Infrastructure’s 1.35 and Indus Towers 2.06 (tenancy ratios as stated in their most recent annual reports). With an oversupply of towers, consolidation of tenants and extremely high operational costs, at one time it looked like independent tower industry was stalling. However, the restructuring of the Indian telecom sector may result in less operators, but they will be higher quality tenants. Where at the turn of the decade there was a swathe of acquisitions of small to mid-sized towercos, helpfully consolidating an overpopulated towerco market, the tower M&A market in India stagnated whilst and is only now returning to life.
Technology, innovation and operational excellence represent the key for independent towercos to remain competitive and Indian towercos are shifting their focus to streamlining their operations and reducing costs.
The shift towards cost saving has already begun and towercos are implementing drastic changes to reduce their operational expenditure. Last year, Indus started reducing reliance on diesel generators by installing batteries at 20,000 of its 112,000 towers. Saving over 3.6 million litres of fuel a year, when fuel and power costs account for 30-40% of opex is definitely a wise move.
The tower count we are providing is our best guess on the current status of the Indian tower industry. However, we will keep reporting on critical changes as we believe the current status of the industry is likely to be reshaped in the near future, as suggested - among others - by American Tower’s intention to bid for the acquisition of Viom Networks.
India tower count
