VCCircle

Tata Teleservices Maharashtra (TTML), the listed arm of telecom services operator Tata Teleservices, is selling its telecom towers for an enterprise value of Rs 1,318 crore to Wireless-TT Info Services (WTTIL).

WTTIL is the joint venture between Tata Tele and Srei group’s Quippo where the Tata group’s privately held telecom business owns 51% stake.

TTML currently operates services in Mumbai, Maharashtra and Goa circles and, as per the deal, will sell its 2,535 telecom towers, being run by its subsidiary 21st Century Infra Tele, to WTTIL that would bring cash inflow of Rs 900 crore.

This transaction values the towers at Rs 52 lakh per unit, around 10% more than the Rs 48 lakh per tower paid by GTL Infrastructure for acquiring Aircel Cellular’s towers earlier this year. As part of this deal, WTTIL has also received a commitment from 21st Century Tele of around 4,000 towers to be rolled out over five years in Mumbai, Maharashtra and Goa.

WTTIL that was formed last year through a merger of the telecom tower operations of Tata Teleservices — in which Japan’s NTT DoCoMo holds 26% — and Quippo, will now have over 38,000 towers. At the same tower valuation, WTTIL would be worth Rs 19,760 crore or $ 4.4 billion. In January 2009, the combined entity had about 18,000 towers, which gave it an enterprise value of Rs 13,000 crore ($2.82 billion).

The transaction will give strategic advantage to WTTIL with lucrative towers network in Mumbai, Maharashtra and Goa. In a statement, the company said, "this transaction will also bring immense benefit to Tata-Quippo with the 3G and WiMax auctions to be conducted shortly and hence the additional requirements for towers in these strategically important geographies."

Although TTML has not stated what it will do with the cash infusion, the money will allow it to get ready to bid for 3G spectrum allowing the firm to offer next generation mobile services.