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Surge in Tenancies Expected for Indian Tower Operators

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India's tower owners are expected to benefit from a short surge in orders from the mobile network operators as they reap the benefits of the recent radio spectrum auction.

Due to the staggered way the mobile networks can pay for their licenses, they have an incentive to roll out coverage quickly and start generating revenue before the later license fees are due.

Citing industry sources, the Business Standard newspaper reported that tower tenancy is expected to grow upwards of 20 percent within the next three to six months, and there will be close to 8,000-10,000 new towers over the next year

The mobile networks get a two year break after they make their first spectrum payments, so they have an incentive to complete their network roll outs before the second installment of the spectrum fee is due in the third year.

Completing the rollout would give them the option to fund the spectrum fees from revenues as opposed from from debt or other resources.

However, the surge in demand for fresh tower space could strain some of the tower owners who will need to raise funds for their own expansion. Viom Networks, for example, is known to be seeking private equity investors and a stock market listing in the near future.

On the web: Business Standard

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Tags: India