Inching closer towards sealing the deal with Norway-based Telenor, Unitech Wireless today signed an infrastructure sharing pact with the tower arm of Tata Teleservices (TTSL) and Quippo Telecom Infrastructure.
As part of the pact, Unitech Wireless will lease tower infrastructure from Wireless-TT Infoservices (WTTIL) and QTIL across India. This agreement will enable the company to roll out GSM services as planned by the second half of 2009, Unitech and Tata Teleservices said in a statement.
In addition, Unitech entered into an agreement for the provision of transmission with Tata Teleservices.
Meanwhile, Telenor CEO Jon Fredrik Baksaas said, “The tower and transmission agreements are the key elements in the closing process of our Unitech Wireless deal and will enable us to embark on its swift and cost efficient rollout.”
Last year, Telenor acquired 60 per cent stake in Unitech Wireless for Rs 6,120 crore.
TTSL recently merged its tower arm, WTTIL, with Quippo Telecom, a pure-play tower company, which will have an inventory of about 22,000 towers by April 2009. The agreement gives Unitech Wireless access to 40,000 sites, as required, based on the rollout plan.
These agreements are a key component for completing the Unitech Wireless deal with Telenor and are expected to happen in the first quarter of 2009. The other condition required for the Telenor-Unitech Wireless deal to materialise was to convert the subsidiaries to private limited companies, which has been met.
The tower sharing and transmission agreements both have 20-year terms with options to extend the contracts for a subsequent five-year period.
Once the deal is complete, Rs 2,000 crore debt from the books of real estate firm Unitech will get transferred to the balance sheet of its subsidiary Unitech Wireless.
According to sources, this week all the GSM equipment vendors have submitted tenders and orders will be placed within one week. Nokia Siemens, Huawei, Ericsson and Alcatel Lucent are the contenders.
“The deal marks an important milestone in the rollout, as it will considerably shorten the time to market for Unitech Wireless. We look forward to a long and mutually rewarding relationship with Quippo, WTTIL and TTSL,” Unitech Wireless Chairman Sanjay Chandra said.
Out of the total deal size of Rs 6,120 crore, Telenor is expected to provide Rs 1,250 crore in the first tranche before the end of the current financial year. Of the Rs 1,250 crore, Rs 350 crore will be repaid to Unitech against the loan of Rs 800 crore.
Tata Teleservices Managing Director Anil Sardana said, “The deal is of strategic importance and value-enhancing for all stakeholders particularly so since WTTIL now stands for the proven expertise of infrastructure management and operational capabilities of Quippo, with the committed support of TTSL.”
“This partnership is a reaffirmation of the strategic alliance between Quippo and Tata Teleservices Ltd, which we announced last month,” Quippo Telecom Managing Director Arun Kapur said.
