Wireless-tower operator American Tower Corporation is close to acquire independent telecom tower operator Xcel Telecom. The Mumbai based company was established in 2006 by former BPL Mobile chief executive Sandip Basu with $500 million in funding from Q Investments. Nasdaq-listed American Tower is acquiring three year old Xcel Telecom for Rs 700 crore, reports Economic Times.
The talks of the deal between the two companies have been going on for some time now. American Tower was in race to acquire a stake in Wireless Tata Telecom Infrastructure Ltd and was also reported to be in race for a stake in Reliance Infratel last month. But its CEO Jim Taiclet had said that the company was interested in operational control of tower assets and not minority stakes.
The telecom tower sector has been going through a process of consolidation. Earlier this year SREI Group-promoted Quipo Telecom Infrastructure Ltd (QTIL) merged with Tata Tele’s tower arm with former picking up a 49% stake in latter for Rs 2,400 crore. The combined entity is operating as an independent tower so it can cater to the new entrants.
Xcel Telecom has about 1,000-1,200 towers in the country. With American Tower Corp paying Rs 700 crore, the deal values each tower between Rs 58-70 lakh. This is in range of Tata-Quippo deal, which valued each tower at Rs 61 lakh. Earlier deals involving Reliance Infratel and Bharti Infratel valued each tower between Rs 1.6- 2 crore.
Being an independent tower operator in India is an attractive proposition at this time. There are a number of new entrants coming into the markets which include Swan-Etisalat, Unitech-Telenor, S Tel-Batelco and Datacom. Telecom tower operators will also benefit from the launch of 3G services in India.
There are other independent operators like Gurgaon-based Independent Mobile Infrastructure and GTL Infrastructure.