American Tower in talks for industry alliance

US firm in tower outsourcing talks with Tata, Bharti, Hutch.

Boston-based global telecommunications tower management company American Tower Corporation is in negotiations with Tata Teleservices, Hutchison-Essar, Aircel and Bharti for outsourcing and management of towers.

This is expected to help Indian telecom companies to reduce their requirement for fresh capital, cut costs and unlock value for shareholders.

Reliance Communications has already decided to hive off its cellphone towers into a subsidiary and offload a significant stake to American Tower.

The Anil Ambani group company is also negotiating with private equity fund Blackstone for picking up a stake. Blackstone CEO Akhil Gupta was unavailable for comment and Reliance Communications executives declined to comment.

Sources said American Tower was looking at various options. It has offered to outsource the telecom operators' requirement for building and maintaining new towers.

It will float a company with a majority control for this purpose in which at least one of the operators could become an anchor client and even take minority equity.

The new company will also rope in other operators to share the infrastructure they build. For operators, this will mean a major reduction in their capital outlay and cost.

American Tower is also willing to take over the management of existing towers, either on contract or by transferring assets into a joint venture. The company could also take stakes in telecom companies which, like Reliance Communications, are looking to hive off their tower assets.

Tata Teleservices and Aircel Chief Executive Officer Jagdish Kini confirmed that talks were on with American Tower. "Yes, they have met us to explain how they do business," Akhil Gupta, deputy group managing director, Bharti Airtel, said. Hutchison-Essar executives, however, declined to comment.