Sets up co to build towers, rectifiers for leasing out

Kripa Raman

The group has created a separate company, Telecom Tower and Infrastructure Pvt Ltd, to construct telecom towers that will be leased out to private operators.

Mumbai, March 16

The Essar group, which holds around 33 per cent stake in mobile operator Hutchison-Essar through Essar Teleholdings, has now entered the telecom infrastructure industry.

The group has created a separate company called Telecom Tower and Infrastructure Pvt Ltd for constructing telecom towers that will be leased out to private operators.

"The company constructs everything, the tower, the shelter, the diesel generation sets, the rectifiers and other components. Telecom operators only have to get their vendors (such as Ericsson, Motorola) to put up the actual telecom equipment and microwave facility," said Mr Ajay Madan, President, Essar Teleholdings Ltd.

Already, over 200 such sites had been built in Maharashtra, Tamil Nadu and Karnataka, he said.

Orders for another 545 sites were in the pipeline.

Many of them are for the circles of Hutch that were bought out from the BPL mobile group. Telecom Tower is also constructing sites for mobile operator IDEA Cellular.

However, these sites can be shared by several operators too. Once the sites are constructed, they are leased out to telecom operators.

The company, with its IP1 licence, is into what it calls constructing "passive infrastructure" for telecommunications.

There is great scope for this business, what with telecom operators having to construct more and more sites both when they get more customers as well as when they expand their networks to cover newer geographies.

Outsourcing the construction of the site would allow them to expand faster. Sharing of sites makes for lower infrastructure costs as well.

Tata Teleservices, for instance, has invited Requests For Proposals for constructing telecom towers, said Mr Madan.

(This article was published in the Business Line print edition dated March 17, 2006)
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