Indus Towers - JV of Bharti Airtel, Vodafone and Idea

The Bharti Group, Vodafone Essar and Idea Cellular on Saturday agreed to form Indus Towers Ltd to provide passive infrastructure to other mobile operators.

The new company will go for an initial public offering later. The independent company, which starts off with about 70,000 towers, is expected to roll out another 50,000 towers over two to three years.

Speaking to Business Line, Mr Akhil Gupta, Joint Managing Director, Bharti Group, said: “Our aim is to get the new company listed over a period of time. We want it to be a totally independent venture with its own management and that is the reason why none of the partners has been given a majority stake.”

While Bharti and Vodafone Essar will each own 42 per cent stake in the tower company, Idea Cellular will hold the balance.

Indus Towers will be operational across 16 circles including Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Mumbai, Punjab, Rajasthan and Tamil Nadu.

Apart from leveraging on operational efficiency, the merger is aimed at getting a bigger valuation for their countrywide mobile infrastructure.

“Merging their tower business would naturally push up the valuation. It will also bring down the cost of operation drastically for the operators, as they will be able to ride on each other’s network,” said a market analyst.

It will also result in additional revenues for the three companies as the infrastructure can also be offered to other mobile operators.

Outside the 16 circles, Bharti will continue to have its own independent tower company— Bharti Infratel.

The mobile subscriber base is expected to touch 500 million by 2010 for which at least 3 lakh more towers are required.

Other pan-Indian telecom players such as Reliance Communication have already hived off their infrastructure into separate tower business.

Exclusive mobile infrastructure companies such as American Tower Corporation and GTL have also jumped into the fray.