We'd like to share with you on the changing dynamics of the Telecom Infrastructure industry in India
Impact of Spectrum Trading
On spectrum trading, there are only preliminary details from the government the process and the mechanics are not
clear yet. We do not anticipate full-scale M&A in the near term, and regardless, while we think that the tenancy demand could be delayed somewhat, we do not expect it to be reduced meaningfully. With more spectrum, there is potential for higher data volumes, for which more capacity is still needed, regardless of technological advancements.
Impact of new single BTS that cater to multiple bands
This concern gained some airplay when IDEA recently highlighted that it is focusing on rolling out multi-band equipment. The impact of this will be on loading potential on the new sites. (Loading refers to deployment of additional equipment, by an existing tenant, over and above the configuration specified initially in the lease agreement, and this leads to 10-15% increase in revenues, but does not
impact the tenancy count).
In the event of multi-band equipment, there may not be a need for loading (software upgrade and additional cards could suffice); however, this should not impact the loading potential on the legacy equipment. Moreover, a reduction in loading leaves more space on towers, which bodes well for full incremental tenancies to be added.
BSNL entry into Telecom Towers & Infrastructure
Based on recent press reports, the government is planning to hive off BSNL?s 65k towers into a new company, and is also possibly
looking at outsourcing its operations to another company.
BSNL?s towers, if marketed and managed well, could be a formidable competitor ? we expect these towers to have attractive locations, with low tenancy at this stage. However, a lot of details around the timing of siphoning off, leasing terms, and above all, who will be managing these towers, remain unclear.
