Telecom aspirants dial up tower firms

Wannabe telecom operators will take a while to know whether they have passed the Telecom Regulatory Authority of India's test. But that hasn't stopped them from taking the next step: tying up with infrastructure providers such as tower operators for rolling out their nation-wide operations.

The reason is simple: the Department of Telecommunications has already said it wants to restrain "non-serious players" and companies are going all-out to convince TRAI about their intentions before the regulator begins scrutiny of their applications for awarding spectrum.

That explains why some of the companies have already initiated discussions with infrastructure providers such as Reliance Telecom Infrastructure Ltd (RTIL) and GTL Infrastructure (GTIL).

Around 30 applications for over 400 licences were submitted with the regulator and, most of the aspirants are from unrelated sectors like real estate and consumer durables. Companies like DLF, Parsvnath, IndiaBulls, Videocon Group and Sterlite Infrastructure, among others have applied for Unified Access Service Licences (UASL). A UAS licence permits a company to operate telecom services, both mobile and fixed, in the country.

Spokespersons of RTIL and GTIL confirmed that they were in discussions with various firms, even though they did not divulge the names of the companies.

Telecom major Reliance Communications' subsidiary RTIL, with 14,000 towers, and network services provider GTL's subsidiary GTIL, with over 3,500 towers, are the major players in the industry. Essar Telecom (2,000 towers), Quipo Telecom Infrastructure (1,500) and Israel-based Tower Vision are the other significant players.

The tower companies were looking at hosting a minimum of four and a maximum of seven tenants per tower as well as multiple technologies (CDMA, GSM and other emerging technologies).

According to an analyst, setting up of a single tower would cost around Rs 27-30 lakh and could be even higher depending on the terrain. A tower company would charge anything between Rs 45,000-50,000 per month from the anchor tenant (first tenant), while it could reduce the rate for single tenants.

The charges include actual rentals, equipment costs and passover expenses (municipal taxes and other levies). For a pan-India infrastructure leasing (222 circles), the tower company would charge around Rs 650-700 per tenant, he said.