Worrying signal for telecom companies as rentals for towers come down

The joint venture (JV) of Bharti Infratel and Indus Towers is expected to create the largest tower firm in India

As Vodafone Group looks to monetise its stake in the Bharti Infratel-Indus Towers merged entity, analysts point out that valuations of tower companies have been affected of late as customers exited on account of consolidation in the sector. 

Reports suggest that Vodafone Group may look to use proceeds from the stake monetisation to release the pledged shares in Vodafone Idea. The valuation of the tower business thus, assumes significance. It has been affected as tower rentals have been under pressure. 

CRISIL analysis of the past few quarters of tower rentals indicates that in the second half (H2) of 2017-18 (FY18),