We are open to JVs but must have operational control: American Tower CEO

'Abruptly changed, unpredictable policies are not good for investments. If we do the same in the US, there will be less Indian investment in the US', said Taiclet

Chairman and CEO of American Tower Corporation (ATC) James D Taiclet Jr, who’s currently in India as co-chair of the US-India CEO Forum, tells Surajeet Das Gupta & Megha Manchanda that the company sees opportunity in fibre while continuing to grow its traditional tower business. 
 

Edited excerpts from the interview:

What is ATC’s India growth plan and outlook for the next five years? Do you see new opportunities in this country? 

It will be on two dimensions — we will grow our traditional asset base of towers. We will also bring in more assets into our company in an inorganic fashion over a period of time. Even for 4G, there will be new opportunities for sharing ancillary assets, which predominantly include fibre, the need for providing data storage at tower sites for 5G  and in-building solutions. We will build assets for sharing in all these spaces. 

Are you open to a joint venture with Reliance Jio or any other player in towers?

We are very open to joint ventures but we must have operational control and the ability to consolidate the investments in our financial results. By operational control, we mean there should not be any intervention from mobile operators in the business. Scale is important in this industry and mobile operators have got massive needs. The more scale we have to serve them, the more successful they and we will be as partners. We will keep a very close eye on the Indian telecom landscape. 

What will be the route for you to enter the fibre infrastructure business? 

We do not rule out asset acquisition. One approach is complete organic build-up to connect our towers with a fibre backbone. There are other options too. There are three to four players already in this market with 25,000-30,000 miles or route km of intra-city fibre and we can partner anyone or more of them on a purely commercial or a joint venture basis. This is something we are evaluating right now. We know it will be a necessity for an effective 4G rollout. Since we are doing intra-city fibre, there are others who may want to piggyback on that business. 

Do you think consolidation in the telecom industry will impact your India business? 

We always built for consolidation in every country, but it is generally gradual in most countries. In India, the consolidation happened in 12 months when suddenly many telcos closed down because of the entry of Reliance Jio. We lost 30 per cent of our business and took a hit. But we expect the tower business to more than double in the next few years with 4G. 

Are there concerns from American businesses on India’s FDI policy? 

Abruptly changed, unpredictable policies are not good for investments. If we do the same in the US, there will be less Indian investment in the US. This is just the principal we offered in the CEO Forum. There was a time when many held back investment a little bit because of the tax policy, which changed abruptly in this country and we watched the Vodafone case. But this got fairly resolved in the court system. And we moved on and made more investments.

In relation to the e-commerce sector specifically, how will the issues linked to FDI norms be resolved?

The general trend of relationship between the two countries has been completely positive. Many of the individual items have been resolved and many that have come to the attention recently will also be resolved in a mutually beneficial way. We have about six to seven joint industry groupings that would together come up with recommendations and opportunities that industry would pursue. In the course of that, if there are items that fall out, we would raise those constructively. 

Which are the big opportunity areas? 

There are opportunities in areas such as energy, water and environment. In the energy side, we are recommending setting up a domestic lithium-ion battery industry in India. It’s less economical to import, go through the taxation system and shift these large heavy batteries from other parts of the world than installing systems here. US companies are willing to assist their Indian counterparts with technology in this space.