ATC may sign Rs 20,000 crore deal to buy Viom Networks

Reliance Jio in deal with ATC India
American Tower Corporation (ATC) is expected to announce its deal to buy substantial stake in Viom Networks in a deal valued at nearly Rs 20,000 crore.

Hindu Business Line reported that ATC will buy the stake from existing investors including Kolkata-based Srei Infrastructure. The Tata Group, which currently owns a 54 percent stake in Viom, will retain minority stake.

The deal with Viom will be the American company’s biggest acquisition in India since it entered the country eight years ago. Viom, a joint venture between Srei Infrastructure and the Tata Group, has over 42,000 towers.

ATC to gain from 3G and 4G tower boom

ATC is strengthening its India presence at a time when Indian telecoms are expanding their 3G and 4G coverage.

Recently, Morgan Stanley said: “With telecom operators launching 4G aggressively, we could see the top three operators adding nearly 100,000 to 150,000 sites over next 12 months. We estimate an incremental 30,000 for Bharti Infratel in FY 2017.”

Morgan Stanley says the spectrum sharing guidelines announced by the India government will not impact telecom tower companies in India.

“Contiguous spectrum increases network capacity nonlinearly, but the sharing benefit needs to justify the 0.5% hike in spectrum usage charge for both the operators sharing the spectrum. The possible buyers of any spectrum would need to pay out the typical long-term contract (6-12 years) as exit fees, which largely equates to all the future revenues expected,” said Morgan Stanley.

Recent ATC tower deals

Recently, ATC acquired the telecom tower assets of KEC International for Rs 81 crore.

In 2009, ATC had acquired 1,700 towers of Xcel Telecom, founded by former BPL Mobile CEO Sandip Basu, for an undisclosed amount.

In 2009, ATC announced the acquisition of 400 towers from Kolkata-based tower company Transcend Infrastructure for about Rs 95 crore.

In 2010, ATC acquired 4,630 towers from the Essar Group for about Rs 2,000 crore.

Recently, ATC acquired nearly 11,300 towers from Verizon Communications in the U.S. for over $5 billion.

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