2024 represents a defined year towards rationalisation of India’s telecom tower market. American Tower’s exit and improved 5G deployments will help ease the pain of the last year.
American Tower officially exited its operations in the country in September 2024, having agreed a deal with Summit Digitel’s owners Brookfield (operating under the new brand name Altius) to sell their loss-making 77,712 sites for US$2.5bn at the beginning of the year. By acquiring American Tower Brookfield may be creating further opportunities for lease-up for its two businesses (Brookfield’s DIT (Brookfield’s infrastructure investment trust) itself houses Brookfield’s other telecom tower and related infrastructure investments in India: Summit Digitel, Crest Digitel and the newly launched Roam Digitel). Brookfield’s anchor client is Reliance Industries’ Jio, whose entrance into the market caused 14 operators to cease operations between 2016 and 2021.
This led to the abandonment of thousands of towers and significant decommissioning which impacted the profitability of the majority of the country’s towercos. The market leader is Indus Towers, which reached its 180,000 plus site count following a merger with Bharti Infratel which was completed in November 2020. Bharti Infratel was the carve out towerco of Bharti Airtel, and they also owned a 42% stake in Indus Towers pre-merger, alongside Vodafone. Summit Digitel is owned by Brookfield, who purchased Reliance Jio Infratel’s tower assets a few months prior in September 2020.
An interesting dynamic is also emerging between Vodafone Idea (VI) and American Tower. Vi has been struggling with enormous debt that has seen dues owed to American Tower, Indus Towers and the regulator unpaid. In order to help secure payment a number of measures have been undertaken, including the government converting licence fees to equity, Vi selling part of its stake in Indus Towers and agreeing a payment plan to maintain access to sites owned by the towerco.
In June 2024, Vodafone Group sold 18% of its shares in Indus Towers for €1.7bn (US$2.16bn) so it can repay its debts in relation to the outstanding bank borrowings of €1.8bn secured against Vodafone’s Indian assets. Therefore the transaction is unlikely to benefit Vi’s own debt situation.
India - telecom market statistics Q3 2024
Other independent towercos include GTL Infrastructure, who were rocked especially hard by the abandonment of towers and Ascend Telecom (which aquired another major competitor TowerVision in 2023). A few operators retain towers in the country, BSNL, RCOM, Airtel and Bharti Hexacom all retain some towers.
Following Jio’s entrance and the rapid consolidation, the Indian market now functions with four MNOs. Jio and Bharti Airtel lead the pack, while Vodafone Idea lags behind in terms of network coverage. BSNL has a small market share.
The more stable status quo has allowed for 5G spectrum auctions to be successfully completed. Airtel and Jio have taken adequate spectrum to meet the requirement for their 4G and 5G networks across all 22 telecom circles. VI look likely to continue to focus on 4G development and be more strategic with its 5G rollout. Initially it looks like they will focus on main urban locations.
All three MNOs rolled out their network in a phased manner in 2022, starting with the major metro cities, state capitals and other Class A cities. Jio and Airtel have made significant progress and are expected to reach nationwide coverage in the next two years.
BSNL is focusing on completing its 4G deployment and initially did not participate in the auction, although in early 2023, it requested additional spectrum beyond what was reserved for it in 2022.
India - estimated tower count Q3 2024
The demand for new sites driven by 5G is expected to revitalise the tower industry, with estimates that India needs to add 500,000 new sites in the next few years, although many of these will be smaller infill solutions rather than macro sites.
New forms of wireless infrastructure including small cells, poles and DAS are being deployed across the country at scale. In August 2022, BSNL announced plans to sell 10,000 towers worth approximately US$500mn. The sites for sale are those where BSNL shares infrastructure with one of India’s three private MNOs, implying a strong tenancy ratio across the portfolio.
Power remains a key topic for the Indian towerco market, where towercos provide power as a service. India recently transformed to an energy surplus country and the government has put a lot of effort into encouraging renewables such as solar, wind, hydro and hydrogen power solutions as well as improving the quality and availability of the grid.
The government’s mission to create 100 Smart Cities and Towns in India is also a driver of growth for the country’s infrastructure players. The initiative was launched in 2015 and to date, around two thirds of the identified 7742 projects have been completed.
To support this rollout Telecom Minister Ashwini Vaishnaw explained that BSNL was in the process of ordering 6,000 towers and would shortly follow up with two additional orders; one for a further 6,000 and one for 100,000.
BSNL have carved out their 159,000 towers into a separate entity, although TowerXchange understands that no external capital has been invested, and the company does not operate as a towerco in terms of actively marketing and seeking co-locations at sites. As such the towers are still classified as being owned by the MNO.
