IndiaWatch: Towering Investments

In the Indian telecom market at present, you're pretty much assured three things: Mobile subscriber levels will continue to rise at an eye-watering rate; telecom assets will continue to attract overseas investors; and the 3G spectrum auctions will continue to be delayed. (See Indian Operator Expects Lengthy 3G Delay .)

Telenor, American Tower buy in
American Tower Corp. (NYSE: AMT), which currently owns and operates more than 23,000 wireless tower sites in the U.S, Mexico, and Brazil, is the latest overseas company to announce an investment in the Indian telecom sector.

Earlier this week it filed an 8-K form with the Securities and Exchange Commission (SEC) noting that its "Mauritius subsidiary has entered into a definitive agreement under which it will acquire an Indian company, XCEL Telecom Private Limited, which owns approximately 1,700 wireless communications tower sites in India, including a number of tower sites that are currently under construction."

The deal is set to be completed in the second quarter of this year, but American Tower did not state a price. India's Economic Times newspaper, though, reported that the deal will be valued at around 7 billion Rupees (US$139 million). The Indian wireless tower site sector has witnessed a great deal of activity in the past 18 months as operators seek the most cost-effective ways to plan and expand their cellular and WiMax networks. (See India Extends Network Sharing Rules, Tata to Sell Tower Stake, and Bharti Infratel Gets $250M.)

And the importance of securing a tower site deal in India was highlighted recently when Norway's Telenor Group (Nasdaq: TELN) advanced its plans to invest in Indian mobile operator Unitech Wireless following the completion of a tower-sharing deal. (See Unitech Shares Towers.)

Telenor announced this week that it is close to completing its $1.2 billion investment in Unitech, but revealed that it will hold a 67.25 percent stake in the Indian license-holder once the transaction is complete, rather than the 60 percent stake originally announced. (See Telenor Nears Unitech Stake.)

Telenor and American Tower are among a growing number of overseas firms investing in India's telecom sector. (See IndiaWatch: Game-Changin' Days, IndiaWatch: Batelco Buys Into GSM Startup, NTT Takes $2.7B Stake in Tata, Etisalat Buys Into India, and Sistema Adds to Shyam Stake.)

Tata brings 100 Mbit/s broadband to Mumbai
Tata Teleservices (Maharashtra) Limited (TTML), an affiliate of Tata Teleservices Ltd. that provides services in the Maharashtra region of India, has launched an "ultra high speed" broadband service called Power Launcher in Mumbai. (See Tata Unveils 'Power Launcher'.)

The operator, which has about 400,000 fixed line customers in the city, says the Ethernet access service will provide broadband speeds of up to 100 Mbit/s. The service requires deep pockets, though -- it costs INR10,500 ($209.18) per month.

The operator also announced the launch of TelePresence services, in partnership with Cisco Systems Inc. (Nasdaq: CSCO) and IBM Corp. (NYSE: IBM), and a wireless broadband service called Photon+, which offers downlink speeds of up to 3.1 Mbit/s to routers and USB modems over the operator's CDMA 1X mobile network.

Russian stake in Sistema's Shyam
Reports from India suggest that the Russian state is set to buy a 20 percent stake in CDMA mobile operator Sistema Shyam TeleServices Ltd. from Russian conglomerate Sistema JSFC (London: SSA) for about $680 million.

According to this Economic Times report, the planned investment is part of the Russian government's revised 2009 federal budget, which is still in draft form and due to be ratified later this month.

Sistema owns a 73.7 percent stake in the Indian operator, which currently has about 500,000 customers in Rajasthan, a telecom service area, or "circle," in the northwest of the country. If the Russian state proceeds with the investment, Sistema's stake would drop to 53.7 percent. (See Shyam Launches CDMA Service, Sistema Adds to Shyam Stake, and A Guide to India's Telecom Operators.)

Maxis pumps up Aircel
Malaysian carrier Maxis Communications Bhd. has committed a further $10 billion investment in its Indian operator, Aircel Ltd. , according to this Economic Times report, which cites Maxis CEO Sandip Das.

Maxis acquired a majority stake in Aircel -- which currently provides services in 12 circles and has 17.5 million customers -- in January 2006. Aircel holds licenses for all 22 of India's circles, and so needs significant capital to roll out its network further. The operator last year awarded a $400 million GSM equipment deal to Chinese vendor ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763). (See ZTE Wins India Deal.)

Other recent news of interest from India includes:

— Ray Le Maistre, International News Editor, Light Reading

DCITDave 12/5/2012 | 4:08:47 PM
re: IndiaWatch: Towering Investments

re: "Power Launcher in Mumbai"

Ray, should we open a bureau there? Volunteers?

somanvenugopal 12/5/2012 | 4:08:41 PM
re: IndiaWatch: Towering Investments


Soman Venugopal

Mumbai, India

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