Small Sites, Optical Fibre Network To Boost Tower Sector, Says Bharti Infratel
Bharti Infratel Ltd., which will become the world’s largest tower company after its merger with Indus Towers Ltd., expects small cell sites and connecting towers through optical fibre to be the next growth opportunity as India moves towards fifth-generation networks.
Small base stations that are used to increase data capacity will see higher demand as compared with traditional towers, Devender Singh Rawat, managing director and chief executive officer at Bharti Infratel, told BloombergQuint in an exclusive interview. Macro cell sites are used to expand coverage, while micro stations help in ramping up capacity.
Given the price sensitivity of the market, sharing of small cell sites will be the logical and profitable way for operators and that’s where Bharti Infratel will come into play. In India there is huge potential in sharing small cells unlike in other nations.DS Rawat, MD & CEO, Bharti Infratel
SmarTx Services Ltd., a wholly-owned subsidiary of Bharti Infratel, owns the licence to lay fibre, he said. It has laid cables in Bhopal as part of the smart city project.
Fibres within the city integrated with small cell sites will be a great solution for 4G networks and a mandatory requirement for 5G networks.DS Rawat, MD & CEO, Bharti Infratel
The tower company’s tenancy addition slowed as telecom operators upgraded 4G networks amid consolidation in the sector, spurred in part by aggressive pricing of Reliance Jio Infocomm Ltd. Rawat sounded optimistic on tenancy growth in the long run, aided by expanding 4G networks and the introduction of 5G.
After the Bharti Infratel-Indus Towers merger—which the market regulator Securities and Exchange Board of India approved late last month—the tower industry in India will have only two major players, Infratel-Indus and American Tower Corporation.
ATC, which owns nearly 76,500 towers in India, lost more tenants due to exits by struggling mobile operators such as the Anil Ambani-led Reliance Communications Ltd. Yet, Rawat said, there has been no sign of competition driving rentals lower.
Bharti Infratel has a major share of tenancies from the larger operators—Bharti Airtel Ltd., Vodafone India Ltd., Idea Cellular Ltd. and Reliance Jio Infocomm Ltd.—which kept it insulated from the exit of smaller operators over the past few years. But the merger of Vodafone India and Idea Cellular is expected to result in nearly 20,000-25,000 tenancy cancellations for the tower infrastructure provider. Some of the loss will be cushioned by exit penalty from the operators.
“We might prefer to waive or lower the penalty if the compensation is in the form of streamlined revenues over a longer period, Rawat said. “We might look at options that create a win-win situation.”