Indian mobile operators Bharti, Idea, and Vodafone Essar announce formation of independent tower company Indus Towers

December 8, 2007

3 Min Read

NEW DELHI -- Bharti Infratel Limited, Idea Cellular Limited and Vodafone Essar Limited announcetoday that they have agreed to form an independent tower company, Indus TowersLimited, to provide passive infrastructure services in India to all operators on a nondiscriminatorybasis. This follows the infrastructure sharing MoU signed between Bhartiand Vodafone in February 2007.

The three companies will each merge their existing passive infrastructure assets in 16telecom circles in India. Bharti and Vodafone Essar will own approximately 42% eachand Idea will own the remaining 16% stake in Indus Towers. New passive infrastructurerollouts in the 16 circles will be undertaken by Indus Towers.

This transaction highlights Bharti, Idea and Vodafone Essar’s commitment to enhancingthe sharing of passive infrastructure and takes a firm step towards delivering on theTelecom Regulatory Authority of India’s (TRAI) recommendations on infrastructuresharing. The primary benefit will be the accelerated expansion of coverage, especiallyinto rural areas, and enables wider access to affordable services for all, helping to meetthe Government’s teledensity targets. Indus Towers welcomes all operators to becomecustomers.

While these operators will continue to run their active infrastructure completelyindependently, they will be able to enjoy capex and opex savings, enhanced operationalefficiency and quicker expansion of coverage.

Indus Towers will be an independently managed and operated company, offeringservices to all telecom operators and other wireless services providers such asbroadcasters and broadband services providers. Indus Towers will have approximately70,000 sites at inception providing it with significant scale benefits, and will undertake asignificant rollout of telecom infrastructure to propel the mobile sector towards achievingIndia’s teledensity and rural coverage goals within the next few years.

The formation of Indus Towers will enable telecom operators to reduce operating coststhrough economies of scale. The Indian consumer will be the ultimate beneficiary of thisinitiative through improved network quality and broader coverage especially in ruralareas.

In a separate release:

NEW DELHI, India -- Bharti Infratel Limited, a subsidiary of Bharti Airtel Ltd, is partnering Vodafone Essar Limited and Idea Cellular Limited to form Indus Towers Limited, an independent tower company to provide passive infrastructure services in India.

Indus Towers, with approximately 70,000 sites, will be formed by merging the passive infrastructure assets of the three companies across 16 telecom circles in India. The 16 telecom circles are Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Kolkata, Maharashtra, Mumbai, Punjab, Rajasthan, Tamil Nadu (including Chennai), UP (East), UP (West) and West Bengal. Bharti Infratel will transfer approximately 30,000 towers to Indus Towers.

Bharti Infratel will operate the passive infrastructure in the remaining 7 circles of Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, North East and Orissa. Bharti Infratel will be managed and run independently and shall offer passive infrastructure services to all telecom operators and wireless service providers on a non-discriminatory basis. It will own approximately 20,000 sites at inception.

In accordance with TRAI’s recommendations to enhance infrastructure sharing, Bharti Infratel will continue its network roll-out in the 7 circles expanding its network coverage with focus on rural India. All operators in these circles stand to benefit with Bharti Infratel’s network expansion exercise, as it will reduce their infrastructure related investments significantly while increasing their operational efficiencies.

Bharti Airtel Ltd. (Mumbai: BHARTIARTL)

Idea Cellular Ltd.

Vodafone India

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