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Tower assets monetisation may help trim industry debt, says ICRA

December 11, 2017

According to the Investment Information and Credit Rating Agency (ICRA), the Indian telecom industry may reduce its debt by about Rs 800-Rs 900 billion if stake sale deals of tower assets of several operators go through.

The rating agency has predicted some headwinds in the short term for the tower industry on account of ongoing consolidation of telecom operators which will result in rationalisation of tenancies. In the medium term, the industry is likely to experience structural changes. It is expected to undergo consolidation and the number of players is expected to drop to from current 10 to about 4-5 in the next one or two years. In the long run, the industry has brighter growth prospects. This growth would be fuelled by the network expansion of telecom operators, keen to meet the data needs of consumers.

Meanwhile, according to ICRA, ownership is likely to change hands from telecom operators to independent players.  Currently, almost 74 per cent of industry’s total tower portfolio is either under the control of telecom operators directly or through tower companies promoted by them.

The telecom tower tenancies have grown at compound annual growth rate (CAGR) of 5.5 per cent over the last four years. However, the growth in rentals during the same period has been very small.



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