KKR & Co, Stonepeak, and Macquarie eye Ascend Telecom after ATC Asset loss

KKR & Co, Stonepeak Partners, and Macquarie Capital are in talks with bankers for a potential investment in Ascend Telecom after missing out on American Tower Corporation's India assets

KKR & Co, Stonepeak Partners, and Macquarie Capital are reportedly in discussions with merchant bankers regarding a potential investment in Ascend Telecom Infrastructure Private Ltd, India’s third-largest telecom tower company, according to a report by Mint.

This comes after the investment funds missed out on acquiring American Tower Corp's assets in India, which went to Canada’s Brookfield.

The report quoted sources as saying that the investment firms are eager to initiate talks with Ascend, which is fully owned by US-based Global Infrastructure Partners. “They’ve approached bankers and have asked them to gauge the interest of the promoters. Early-stage discussions are expected to take place in the coming weeks or months, but a final deal is likely in four to six months,” a source said, mentioned by the news report.

 

India’s telecom market is growing rapidly, boasting over 809,000 towers, with an annual growth rate of 7 per cent. Given the funds’ strong interest, a swift deal could be in the works. Reports suggest that KKR, Stonepeak, and Macquarie were among the early contenders for ATC’s assets in India, the report said.

Telecom sector’s strong market position

In recent years, the telecom infrastructure sector has attracted significant attention from global infrastructure, sovereign, and venture capital funds. Key players in the market, such as Reliance Jio and Bharti Airtel, are enhancing their 5G capabilities and expanding broadband services into rural and semi-urban areas. This expansion is expected to increase demand for new towers and small cells, positioning the sector for potential growth and investment opportunities.
 

Ascend Telecom serves major clients, including Bharti Airtel, Vodafone Idea, Reliance Jio, and BSNL. The company operates around 18,600 towers with 30,800 tenancies, providing high-power small cell sites, fibre-to-the-home services, and edge data centre infrastructure.

Ascend’s portfolio

In the June quarter, Ascend reported a profit of Rs 192.90 crore, recovering from a loss of Rs 26.70 crore in the same period last year. Revenue grew by 12.17 per cent to Rs 292.10 crore, up from Rs 260.40 crore a year earlier, the report said.

Last year, Ascend expanded its portfolio by acquiring Gurugram-based Tower Vision India Pvt. Ltd for $365 million, which added around 9,000 towers to its assets, making Ascend the fourth-largest player at that time.
 

Brookfield’s recent acquisition of ATC's Indian operations marks its third major investment in the telecom tower space. Brookfield entered the market in 2020 with the purchase of 175,000 towers from Reliance Industrial Investments and Holdings Ltd, creating Summit Digitel. It subsequently acquired Space Teleinfra Pvt Ltd’s 6,300 sites in 2021-22 for Rs 900 crore, rebranding them as Crest Digitel, the report stated.

Altius becomes tower leader

Last month, Brookfield, in partnership with BCI and GIC, acquired ATC India's 76,000-tower portfolio. The combined assets of Brookfield's telecom infrastructure — Summit Digitel, Crest Digitel, and ATC India — will operate under a new brand, Altius, creating the largest tower services provider in India with a total of 257,000 towers.

Before Brookfield’s acquisition of ATC, Indus Towers, primarily owned by Bharti Airtel, was the leader in the Indian tower market with 226,000 towers, formed through the merger of Indus Towers and Bharti Infratel in 2019-20.