4G expansion to take tower companies to new heights

index.jpgSource: The Economic Times, Nov 08, 2016

NEW DELHI: Telecom service providers are set to roll out high-speed data fourth-generation (4G) networks, leading to an increase in tenancy ratio of mobile towers, Tower and Infrastructure Providers Association director general Tilak Raj Dua said.

“The recent spectrum wins will accelerate the deployment of 4G services across India and the growth of data consumption will lead to an increase in tower tenancy ratio,” Dua told ET. Tenancy ratio is the number of telecom operators that have put up their antennae and other active infrastructure on an existing mobile tower on a sharing basis. According to a joint study by KPMG and Associated Chambers of Commerce & Industry, tenancy ratio of mobile towers is set to increase to 2.9 by March 2020 from 1.95 in March 2015.


India has an estimated 4.5 lakh telecom towers at present. Dua said the number of mobile towers is likely to grow 5% a year over the next fourfive years. Operators including market leader Bharti Airtel, Vodafone India, Idea Cellular and Reliance Jio Infocomm have acquired data frequencies to tap into the lucrative mobile broadband market. Telecom tower companies are buoyant as 4G networks are expanding with rapid growth of data services amid falling tariffs due to intense competition and introduction of affordable smartphones. Data consumption could grow twelvefold by 2020, according to analysts.

Dua said that with data coverage at 55% at present, the industry anticipates “aggressive” deployments in the next two-three years, attributing tower infrastructure growth in part to rivalry between the incumbent telcos and the foray of Mukesh Ambani’s Reliance Jio Infocomm.

“It is expected that the incumbents will spend more on network deployment to compete with rivals, maintain quality of service (QoS) and connect the unconnected hinterlands,” Dua said.

Indus Towers, a joint venture between Bharti Infratel, Vodafone India and Idea Cellular, tops the tower market with 31% share, followed by staterun Bharat Sanchar Nigam Limited (18.2%) and Bharti Infratel (9.8%), as per New York-headquartered consulting firm Deloitte.

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