The Indian telecom industry is fragmented, and so is the tower industry, with most companies having preferred tower partners. The top three Indian operators have formed a JV to form Indus. However, Reliance Infratel, MTNL/BSNL, Tata, Aircel, among others, have their preferred companies, which will take a bulk of their tenancy. Therefore, Bharti Infratel / Indus Towers tenancy will have high dependence on the top three operators.
Factors that positively impact the future tenancy potential are 3G network Expansion, 2G tenancy for new entrants who make in-roads into rural areas and 900MHz Spectrum.
3G Network In most circles, operators holding 900MHz spectrum have the highest RMS and have also acquired 3G spectrum to protect their high-ARPU customers. An operator with 900MHz spectrum will require 1.9x the number of sites to provide similar coverage in the 2.1GHz band. Also, the operator has only 5MHz of spectrum in 3G compared to an average 8MHz spectrum in 2G and would thus require more sites.
2G Coverage New Entrants have coverage disadvantage being on 1,800MHz spectrum compared to incumbents in 900MHz spectrum, and so have to continue to invest aggressively in their new circles.
900MHz spectrumBSNL and another one or two operators have this spectrum. However, new operators which are on 1,800MHz, will have to put in more sites to achieve coverage in line with the incumbents.