Quippo Telecom comes from the same stable as Viom Networks, the largest independent tower company in India. The foundations of independent telecom infrastructure industry in India was setup under the aegis of Quippo Telecom more than a decade ago when Sunil Kanoria forged a joint venture with Tata Teleservices to form Viom Networks. Viom Networks owns and manages over 43,000 telecom towers in India, has an industry-best ratio of 2.3 tenants per tower, and last October, American Tower announced intent to acquire a 51% controlling interest in the company. Thus Viom’s sponsors are turning their attention to international markets. In this interview, Shankar Iyer, President – International Business, Quippo Telecom Infrastructure, gives an overview of Quippo’s international expansion plans.
TowerXchange: Please re-introduce Quippo for readers not familiar with the company
Shankar Iyer, President – International business, Quippo Telecom Infrastructure:
We started business in 2005 with only 50 towers. Over the past ten years we have increased our number of towers to 43,000 through a combination of both organic and inorganic growth.
During that time period we managed to pass several milestones. We joined forces with the Tata Group and subsequently took over their tower assets. We also took over some towers from Spice Telecom, a mobile phone service provider based in Punjab and Karnataka.
Another significant milestone took place between 2010 and 2011 when we rolled out 15,500 towers in the space of only 12 months – a world record that remains unbroken.
After Srei Infrastructure Finance Limited agreed to divest their stake in Viom Networks and under the direction of the Kanoria brothers, the company has decided to focus more on international development.
TowerXchange: What is your background in the tower industry Shankar?
Shankar Iyer, President – International business, Quippo Telecom Infrastructure:
I was part of the founding team member both at Bharti Infratel and Indus Towers, I have had the opportunity to remain associated with the tower industry from its inception and as it evolved over the years.
The opportunity to again create a world-class organisation ground up is a fresh challenge for this role. The way the Indian telecom tower story has been built, needs to be shared with other geographies.
TowerXchange: Congratulations on Quippo’s leadership of Viom Networks culminating in the announced sale to American Tower! Please help us to understand in broad terms which portion of the management team will be transferred to American Tower and who will lead Quippo International?
Shankar Iyer, President – International business, Quippo Telecom Infrastructure:
Recognising the changing market demand pattern, Quippo Telecom has established its core management team of reputed, well known and experienced professionals who will lead this initiative.
TowerXchange: What is your vision at Quippo International? Where will you fit into the telecom infrastructure ecosystem and what is your appetite for opportunities beyond India?
Shankar Iyer, President – International business, Quippo Telecom Infrastructure:
We have seen in India and other countries that passive and active equipment is managed by different entities. Active infrastructure management is carried out by OEMs like Huawei, Ericsson, ZTE and Nokia. The mobile network operator today has to deal with multiple business partners for passive equipment. They may require partners for radio and allied products as well as power.
We want to differentiate ourselves from these companies by becoming a comprehensive asset management company. If you look at the market today, many of the operating companies want to hive off their towers. They are more interested in putting their time and capital into their core businesses. We believe that we can add value to these businesses as a single stop shop and an asset management company. Our aim is to manage everything on the client’s behalf.
Quippo’s vision for the heterogeneous network era extends beyond macro towers
TowerXchange: So what assets do you propose actually sit on Quippo’s balance sheet?
Shankar Iyer, President – International business, Quippo Telecom Infrastructure:
Our initial plan is to be a pure play independent provider of passive infrastructure on a separate P&L. We will buy towers from MNOs in a conventional pure sale and leaseback model to create a win-win proposition.
Over a period of time we intend to carry out strategic tie ups with active partners. It’s important to mention that we see ourselves as an execution partner, neutral host provider and an asset management company all rolled into one.
TowerXchange: Appreciating the confidentiality of the current process under way in Russia, what are the factors that generally appeal about opportunities in Russia and the CIS?
Shankar Iyer, President – International business, Quippo Telecom Infrastructure:
It’s interesting that you mention this. Only last week we put out a statement on this subject (see sidebar).
In answer to your question, we’re evaluating opportunities in Russia, the Middle East and various other markets. Companies in each of those regions have appointed bankers to lead the divestiture process. There are open and closed bids going on in these territories and it’s fair to say that we are just one company amongst many that are bidding for the contracts.
Our knowledge and expertise comes from handling large transactions, dealing with asset migration, handling customer relations, managing the speed of delivery and overseeing people, processes and tools. We will make sure that the company is efficient from the start, but we will need to have a local partner from the beginning. We will be able to share our knowledge with the partner and make sure that it is self sufficient, but there will be an independent management team operating in the local area which will be supervised and guided by our corporate management team.
TowerXchange: Is Quippo’s remit exclusively beyond Southern Asia, or can you explore opportunities in India and other countries closer to home?
Shankar Iyer, President – International business, Quippo Telecom Infrastructure:
Our remit is to look at any viable market out there that we think we can bring our knowledge and expertise to. As we are focussing on international business and therefore, we are interested in opportunities in Sri Lanka, Bangladesh and Pakistan, for example within the Indian subcontinent.
TowerXchange: Please could you sum up how you would differentiate Quippo from other towercos seeking to expand internationally?
Shankar Iyer, President – International business, Quippo Telecom Infrastructure:
As I mentioned to you previously, we’d like to begin the company with passive infrastructure and graduate towards becoming a neutral host provider over a period of time once we have settled down.
Let me give you an analogy that might bring the concept to life. We’re a bit like a house of worship. Inside this, you have worshippers from an MNO background, people from active partners, and individuals with a system integration background. Quippo acts like a priest that brings the whole assembly together. We manage the entire complex from the out buildings to the main hall; bring people from different backgrounds together; and make sure that the institution is run to a tight budget. Our goal is to bring efficiencies to every operating company that works with us, so in a sense we want to be known as an efficient comprehensive service provider.
Kanorias give Quippo international remit
As a result of the impending sale of Viom Networks to American Tower, Quippo has a non-compete agreement in India. “We may have moved out of the telecom tower business in India, but that does not stop us from exploring the option of expanding in the telecom tower business outside India,” said Hemant Kanoria, Chairman of SREI Infrastructure Finance in a recent edition of Financial Chronicle. “We are particularly looking at the US, Russia, Africa and the Middle East. We are looking at both the options – taking our investments, technology and expertise abroad; and bringing in technology and funds from abroad. We are exploring inward partnership opportunities and also the options of operating assets overseas,” concluded Kanoria.
