Telecom tower infrastructure companies are bullish about the Rs 1,500-crore opportunity that?s coming their way from the launch of the much-awaited 3-G services. According to them, 3-G services will lead to an increase in tower tenancy by 46,000 slots, thus increasing the tenancy ratio for towers.
The tower infrastructure companies are said to be in talks with operators and are likely to seal deals for 3-G tower sharing in the coming few months. Tenancy ratios are expressed as a fraction of total number of operators sharing towers to the total number of sites present.
Operators will try to leverage their existing 2-G space. However, they would still need incremental space to put up 3-G antennas on the tower. So, for the first two years, 3-G will translate into more effective utilisation of tower assets. “It is estimated that the Indian market will require around 3,50,000? 4,00,000 towers by the end of the current financial year. In addition, the companies may further see an estimated 1,50,000-1,60,000 tenancies being generated to support the entry of new players and also the launch of new products and services on the 3-G/ Wimax spectrum,? said Arun Kapur, CEO, Viom Networks (formerly Quippo-WTTIL).
However, most operators are suggesting no incremental demand for towers and 3-G capex as mere software upgrade, which is not the case. ?3-G services will require approximately two times the density of tower over 2-G. While this will translate into improved tenancy on existing sites and will see some upgradation that will result in additional revenue, we also expect operators to bring in new tenancy as well,? said an official of GTL Infra.
Indian telecom players have spent $15 billion (Rs 69,000 crore) on 3-G spectrum auctions and they would be required to spend at least $2 billion (Rs 9,200 crore) on 3-G rollout. ?As per our analysis, the total 3-G slots occupied would be about 1,40,000 by 2015,? said Rajiv Sharma, telecom analyst with HSBC Securities. ?Further, operators will be able to roll out 3-G services with minimal operating expenses. With a mere monthly payment of Rs 10,000-12,000 per base station, operators will be able to deploy 3-G base stations,?added Sharma.
“Currently, our key customers have approached us for installing 3-G on our existing sites. As you know, our current master services agreement cover 2-G and we are engaged with our customers to derive commercial and technical terms and conditions for 3-G,? said ATC?s company spokesperson.