Action in telecom tower consolidation continues. Private equity major New Silk Route-controlled Ascend Telecom
Infrastructure Pvt. Ltd. (formerly Aster Infrastructure Pvt. Ltd.) and
India Telecom Infra Ltd. have agreed to merge their telecom tower
businesses. The combination will create and independent tower company
with approximately 4,000 towers, and an average tenancy ratio of over
1.6x, said a statement.
Ascend got its first round of investment from New Silk Route in July
2007. India Telecom Infra is jointly owned by Infrastructure Leasing
& Financial Services Limited (IL&FS) and TVS Interconnect Systems, a
part of the TVS Group.
Ascend and India Telecom Infra's customers will include mobile
operators including Idea Cellular, BSNL, Vodafone, Tata Teleservices,
Aircel, amongst others. The companies will be proceeding to file a
scheme of amalgamation with the Honorable High Courts of Andhra
Pradesh and Tamil Nadu to merge ITIL into Ascend after receiving
approvals from all their stakeholders.
"Over the last decade, voice telephony in India has grown at a
phenomenal pace and we are now at the cusp of another revolution in
data usage with tablets, net books and smart phones as the key
enablers. We believe that telecom infrastructure will be the backbone
of this growth and are excited to partner with IL&FS and the TVS Group
to capitalize on this opportunity,” said Parag Saxena, Founding
General Partner and CEO of New Silk Route.
“The merger of ITIL and Ascend is extremely synergistic and provides
all the stakeholders of both companies’ enormous benefits in terms of
an enlarged management team, increased scale, a pan-India footprint,
and significant operational efficiencies,” said R Haresh, Chairman of
While there have been several consolidation moves by the larger
telecom tower players, the deal between Ascend-India Telecom Infra
will be the first instance of smaller players merging to compete in
the market. Earlier reports have said owners of both Ascend and TVS
Interconnect tried to sell the firms.
"Telecom tower companies with a relatively large portfolio of towers
offer certain clear advantages to telcos, including rapid rollout over
a large area, and tenancy driven discounts. Further, large tower
companies can access capital markets better to fund growth. These
advantages make it somewhat difficult for the smaller tower companies
to grow, thereby paving the path for consolidation in the industry,"
said a recent report on the industry by credit rating agency ICRA,
adding that it expects consolidation to continue, with the smaller
players either getting acquired or merging with one another to stay
Some of the large ticket deals in the telecom tower space include
GTL-Aircel and Tata-Quipo, few firms have also scaled by buying
smaller Indian players. Nasdaq-listed American Tower had acquired
smaller players like Xcel Telecom and Transcend Infrastructure before
going ahead with a relatively bigger acquisition of Essar Telecom