Business

Tata Tele merges tower business with Quippo

— PHOTO: RAJEEV BHATT

PERFECT FIT: Anil Kumar Sardana (left), Managing Director, Tata Teleservices, and Sunil Kanoria (right), Voice-Chairman and Managing Director, Quippo Infrastructure Equipment, exchanging documents at a press conference in New Delhi on Monday. Hemant Kanoria, Chairman and Managing Director, SREI Infrastructure Finance, looks on.

NEW DELHI: Tata Teleservices Ltd. (TTSL) is gearing up to launch its pan-India GSM service. The company on Monday made a strategic move by merging its passive infrastructure business (mainly towers) with tower company Quippo Telecom to create a strong telecom infrastructure company.

“We will start our GSM services soon. We have got spectrum for 13 circles and would soon get radio waves for the remaining telecom circles, barring one or two,” said TTSL Managing Director Anil Sardana here.

TTSL, with over 3.2-crore subscribers, will be the second major CDMA player after Reliance Communications to enter the GSM space.

The merger with Quippo Telecom will create a Rs. 13,000-crore entity with 18,000 towers, making it the second largest firm in terms of number of towers across India.

As per the new arrangement, Quippo Telecom will hold 49 per cent in the new entity, while Tata Teleservices would hold the balance in Wireless-TT Info-Services Ltd (WTTIL). However, Quippo Telecom will control the management.

Quippo Telecom Infrastructure (QTIL), which is a SREI Group company, will pay Rs.2,400 crore cash upfront for 30 per cent stake in WTTIL, while it would transfer 5,000 towers to the new company for the remaining 19 per cent stake.

“The deal is of strategic importance and value enhancing for all stakeholders — particularly so since it combines the proven expertise of management and operational capabilities of QTIL with the committed support of TTSL. The combined entity will reap the benefits of significant synergies through combining of portfolios — both at operational and financial levels. This will help further increase scale and reach, while ensuring better asset utilisation, an upside in tenancy and reduction in capital expenditure,” Mr. Sardana added.

“When Quippo pioneered the concept of shared passive infrastructure in 2005, there were no takers. Now, through this merger, the dream is being realised — resulting in a win-win situation for customers and stakeholders of Quippo and WTTIL,” said Sunil Kanoria, Director, QTIL. The company plans to have over 50,000 towers by 2012.

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