Telecom Lead Asia: Mobile tower company GTL has sought up to $275 million compensation from Aircel as the telecom service provider didn’t meet obligations to provide new tenancies, as part of a $1.8-billion buyout of telecom towers three years ago.
Aircel, according to a Times of India report, says GTL Infra’s poor tower management spoiled its service network resulting in subscriber losses. Aircel has struggled to refinance Rs 24,000 crore debts amid operational losses.
At present, both Aircel and GTL are discussing to settle the issue.
GTL Infra, in the midst of a debt restructuring, is serious about en-cashing bank guarantees of Aircel for not keeping up commitments.
GTL Infrastructure reported a standalone sales turnover of Rs 142.23 crore and a net loss of Rs 85.46 crore for the quarter ended Dec ember 2012. EBITDA for the current quarter was Rs 68.52 crore as against Rs 72.14 crore for the corresponding quarter in the previous year.
“GTL Infra received 1,800 new tenancies whereas 20,000 were due in three years. They have secure bank guarantees from big financial institutions backing Aircel, which will be invoked. The claim, including the interest payout, is between Rs 1,000-1,500 crore ($200-275 million),” a source close to the development said.
Aircel towers were locked-in with GTL Infra for 15 years, and the possibility of a break-up between the two partners remained remote.
An Aircel spokesperson said the company was well within its contractual obligations. “However, like in any partnership, small issues if and when arise are sorted amicably,” he added.
GTL Infra had acquired 17,500 towers from Aircel in a deal financed by SBI-led consortium. At present, GTL Infra, a Global Group enterprise, has a portfolio of over 30,000 towers located across India.
The tussle with GTL on tower infrastructure has created another hurdle in Aircel’s plans to sell stake to a strategic buyer. Due to its involvement in the 2G spectrum issue, Malaysia’s Maxis is keen to exit from Aircel.
Aircel, which is in the process of reducing its exposure in India, argued that badly managed towers added to its operational issues and losses. Aircel is also looking at shifting towers from five telecom circles where it is scaling down operations to cut losses.
