Bharti Infratel in talks to acquire Tower Vision India

NEW DELHI: Bharti Infratel, the independent tower company of the Bharti Group, is in talks to acquire Tower Vision India, a company owned by a group of international financial investors, two people familiar with the development told ET.

“Tower Vision, which has about 8,500 towers with a tenancy ratio of 1.8, is expected to be valued at about Rs 4,000 crore, including debt of about Rs 1,000 crore,” said one of the people. Tower Vision has an annual turnover of about Rs 1,000 crore with an operating margin of about 25%, the person said.

Bharti Infratel, the only listed tower company in India, has about 89,000 towers, including proportionate ownership of these assets in Indus Towers, a joint venture between Bharti Infratel, Vodafone India and Aditya Birla Telecom.



“Given the constraints in putting up new towers, Bharti Infratel is looking at the inorganic route to ramp up its tower numbers and increase its foothold that would help meet the rising demand of 3G and 4G operators,” the second person said.

By 2020, 3G and 4G will become the leading technologies as the smartphone subscriber base is expected to rise exponentially, the person added.

Tower Vision, based in Gurgaon, did not respond to queries seeking comment on the proposed deal. Spokespersons of the Bharti Group and ATC declined to comment.

“As a policy, we do not comment on market speculation. Being a responsible corporate, we always make appropriate disclosures to the stock exchanges and our stakeholders as and when required,” the Bharti spokesperson said.

Quadrangle Capital Partners, a New York-based firm, led a consortium of companies that invested in Tower Vision in 2010, providing it with about $300 million, including debt financing.

Other investors are Israel-based Fort Group, a private holding and investment company with global expertise in developing cellular operations and real estate development, and Mivtach Shamir Real Estate, also from Israel.

With a tenancy ratio of about 2.1, Bharti Infratel’s market capitalisation of over Rs 71,000 crore is significantly higher than the per-tower valuation of the proposed transaction. The ratio indicates the number of operators who have put up their antennae and other active infrastructure on the towers.

Bharti Infratel is looking at expanding in India rather than overseas and is counting on demand from local telecom operators for more towers as they launch 4G services.

With opposition from residents to putting up new towers in populated areas, existing base stations are vital for expansion and strengthening the company’s position.

Some consolidation has been taking place in India’s telecom tower business.

The government approved American Tower Corporation’s acquisition of a 51% stake in Viom Networks in April. ATC, which unsuccessfully bid for Tower Vision in 2013, has also shown interest in this transaction, another person familiar with development said.

Reliance Communications signed a non-binding pact in December to sell its mobile phone masts business to a group of companies led by buyout firm TPG Capital Management LP, but the final terms of that deal are yet to be announced.

Indus Towers, in which Bharti Infratel holds a 42% stake, is also looking at acquisitions to strengthen its footprint. “Bharti Infratel is focused on identifying opportunities for inorganic growth that are value accretive and feasible,” the company said in its earnings statement for the previous financial year.