Incorporated in November 2007, Indus Towers Limited is a joint venture between Bharti Infratel Limited, Vodafone India and Aditya Birla Telecom to provide passive infrastructure services to telecom service providers. The company has a portfolio of 115,040 towers in 15 circles across the country and also has achieved 248,611 tenancies. B S Shantharaju, CEO, Indus Towers talks about the trends in the telecom infrastructure industry and the company?s key achievements?

What are the key emerging opportunities for telecom infrastructure providers in the country? How are they planning to leverage the same?

With the upcoming spectrum auction and the subsequent roll out of 3G and 4G networks, the requirement for towers across the country is going to increase substantially. Although all tower companies have scaled down rollout plans to avoid a surplus situation, it has given the telecom infrastructure industry a scope for growth and expansion in tenancies across all circles in the country. Indus already has an existing network of towers available for use and will have the opportunity to increase tenancies in all its sites across 15 circles.

What Are the key challenges associated with the country?s telecom infrastructure, particularly in rural areas? How can these be addressed?

There are multiple challenges in serving rural communities. Some of them are listed below:

Power? It requires at least 20+ hours to run a telecom site. Most of rural India is poorly served by the power grid. Some areas may get ?agricultural power? ? two hours in the morning and evening ? but even this is the exception.

Access? These are extremely remote communities, served by poor roads and no other significant infrastructure.

Skills ? There are no trained telecom engineers and few people can read or write. This makes the installation and maintenance of GSM networks highly challenging.

The government would have to step in and help build roads and make a provision of electricity for an improved telecom infrastructure in rural areas.

In urban areas, the sentiment of people as well as local governing bodies towards telecom towers has been marred lately by the growing concern on the negative impact of EMF radiation. However, over the years, Indus has been working on educating the local people about EMF radiation through various initiatives and we are certain that our efforts in this space will ultimately lead to the end of all misconceptions about EMF radiation at tower sites.

What are the various measures being undertaken by tower companies to manage their energy requirements?

Reinforcing our commitment towards promoting greener alternatives we have conceived the SHUT DG: Green Sites Project, to run telecom network operations without using diesel as power backup, instead running the network on a more environment friendly advanced battery bank solution without compromising on the network uptime.

Keeping in line with our core philosophy of ?Putting India First?, Indus works towards keeping the environment clean and creating a greener India. Indus has reduced diesel consumption across 15 circles, by 54 million litres, which translates to reduction in CO2 emissions by 140 kgs per annum. Our ?Green Sites? are diesel free and hence optimizing our energy costs substantially. Sharing of sites by multiple operators has also optimized this cost for us significantly. With two to three operators sharing, the energy costs have been brought down by up to 20 per cent to 30 per cent for the respective operator.

What is the tower industry?s regulatory/policy wishlist?

The telecom sector has always formed a major mainstay of the government?s plan of reaching out to the citizens at the last mile and will remain committed to partnering with the government and play an important role in India?s progress. To bolster the growth of the sector, propelling it to be at par with other infrastructure sectors and counter the slowdown, the industry seeks government?s support in these areas:

  • Increase tax depreciation rate on infrastructure investments in towers in rural and semi-urban areas to 100 per cent to encourage setting up towers in these areas and to improve mobile telephony
  • The telecom tower industry is compelled to use diesel in its DG sets in case of power failure to ensure uninterrupted telecom services throughout the country. The excise duty which forms about 20 per cent of the diesel price has been kept outside CENVAT chain, probably because it was heavily subsidised until few months back. However, in the present day scenario where subsidies on diesel are eliminated and infact, oil marketing companies are able to make small profits, it is desired that government amends the definition of Rule 2(k) of Cenvat Credit Rules, 2004 to enable CENVAT credit for commercial use of diesel in power back-up. Since large amounts of diesel are consumed in Railways, Army, agriculture, commercial trucks and passenger vehicles, the amendment will not have any major financial impact for the government. This will also be in line with CENVAT credit presently allowed for other petroleum products like engine oils, lubricants, ATF etc.
  • Increase tax depreciation rate on batteries from 15% to 65% to enable cost recovery within 3 years of economic life and also, to incentivize investments in environment friendly products for power back-up

What is your outlook for the industry in 2015?

Telecom infrastructure is expected to become a key part of the needed infrastructure to grow the Government?sproposed Smart Cities.Indus already is a preferred partner to provide passive infrastructure for all telecom operators and we hope to partner with the Government of India as well to establish world class infrastructure across the country enabling a ?brighter-connected-future? for India.