American Tower Corporation has emerged a strong No.2 player in the telecom tower space with a spree of acquisitions. The company has pumped in nearly ₹25,000 crore to acquire tower assets since it entered the Indian market. Once the deal with Idea and Vodafone is completed, ATC will have 80,000 towers in India. BusinessLine spoke with Amit Sharma, Executive Vice-President and President, Asia, ATC, to know how he views the tower infrastructure space going forward.

ATC has made several acquisitions. Where would you put the latest deal in terms of valuation?

The Essar deal was like ₹52-53 lakh per tower, Viom was around ₹46-47 lakh per tower and this one is about 45 lakh per tower. But these are not comparable because the earlier deals were with tower companies whereas the latest one is with mobile operators. This gives us a future business from the two operators as preferred partners. At an overall level, towers assets have reached a level where the valuations are fair. Three years ago building towers were easy. Now, it is getting much more difficult to get permissions with all the misplaced concerns around radiation. Then there are various levies at the municipal level. So it is difficult to get sites to build new towers. Therefore, it is more prudent to buy already built towers.

Telecom operators in India are exiting the tower space. Is this a good trend?

It is an excellent trend. India was behind the world in this regard and is finally catching up. If you look at the US, operators pretty much got out of the tower business 10 years ago. They realised that this is a different business. For the operators, their business is consumer facing. The tower business is a pure B2B business. Success lies in being the most-efficient manager of tower portfolio. So it makes sense that the operators focus on what they do best.

It’s good for neutral tower players like ATC as well?

It will be much better because there will be true arm’s length dealing between the tower company and the operators. The industry becomes more stable as tower companies become independent and run professionally.

Do you see just 3-4 tower players here?

In most developed markets, there are four operators and about three tower companies. That’s pretty much how India will shape up.

ATC has invested nearly ₹25,000 crore in India so far. Is this the biggest for the company?

We have made large investments in the US for sure. But this would be among the largest investments for ATC outside America.

What does the deal with Vodafone and Idea mean for ATC?

We will now have a portfolio of 80,000 towers, up from 58,000 currently. We will be comfortable number two player in India. This should be enough to have a national play going forward.

Can we expect more acquisitions from ATC?

This gives us as much as we need. We will now focus on organic growth. In a couple of years, we should be around one lakh towers.

What is the demand you foresee for towers as 4G and 5G rollouts happen?

For the next few years, the growth will be muted given the consolidation happening in the sector. Once that is over then the growth will be visible. I expect a high single digit growth. The number of macro sites will not grow as much. Small sites will see higher growth. It will be a gradual growth going forward.

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