Idea Cellular Ltd has announced that Bharti Infratel Ltd, Idea Cellular Ltd and Vodafone Essar Ltd have agreed to form a independent tower Company, Indus Towers Ltd, to provide passive infrastructure services in India to all operators on a non-discriminatory basis. This follows the infrastructure sharing MoU signed between Bharti and Vodafone in February 2007.
The three companies will each merge their existing passive infrastructure assets in 16 telecom circles in India. Bharti and Vodafone Essar will own approximately 42% each and the Idea will own the remaining 16% stake in Indus Towers. New passive infrastructure rollouts in the 16 circles will be undertaken by Indus Towers.
This transaction highlights Bharti, Idea and Vodafone Essar’s commitment to enhancing the sharing of passive infrastructure and takes a firm step towards delivering on the Telecom Regulatory Authority of India’s (TRAI) recommendations on infrastructure sharing. The primary benefit will be the accelerated expansion of coverage, especially into rural areas, and enables wider access to affordable services for all, helping to meet the Government’s teledensity targets. Indus lowers welcomes all operators to become customers.
While these operators will continue to, run their active infrastructure completely independently, they will be able to enjoy opex savings, enhanced operational efficiency and quicker expansion of coverage.
Indus Towers will be an independently managed and operated Company, offering services to all telecom operators and other wireless services providers such as broadcasters and broadband services providers. Indus Towers will have approximately 70,000 sites at inception providing it with significant scale benefits and will undertake a significant rollout of telecom infrastructure to propel the mobile sector towards achieving India teledensity and rural coverage goals within the next few years.
The formation of Indus Towers will enable telecom operators to reduce operating costs through economies of scale. The Indian Customer will be the ultimate beneficiary of this initiative through Improved network quality and broader coverage especially in rural areas.