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ATC to invest in India
By siliconindia
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Tuesday, 05 December 2006, 18:30 IST
New Delhi: American Tower Corporation (ATC) is expected to invest about $100 million in India. The independent communications tower company, ATC, would be investing here through its existing Indian subsidiary.
As per ATCâs initial estimate, looking at the growth of the Indian telecom towers, it would require funding of about $ 100 million over the next three years. Plans are to invest through a mix of debt and equity. The subsidiary is projected to employ about 100 skilled and 300 unskilled wrorkers.
The move comes close on the heels of another U.S based entity Keffi Group planning to invest more than $670 million over the next five years in the communication tower business in the country, as per a report in Economic Times. ATC may have to dilute up to 26 percent of its equity in favor of Indian public within five years. Under current guidelines, an overseas listed company will have to list in India as well.
Telecom towers have emerged as a potential business sector in India. Till date, telecom operators were investing in erecting communication towers themselves taking care of maintenance and other service back-ups.
With major tower owners and operators like ATC there is a new source of funding, unlocking the value of existing assets and even building efficiencies. These companies have a multifaceted business model of designing, construction, purchasing, selling, repairing, upgrading and commissioning communication towers. They also lease towers and allow multiple tenants to use the same tower, thereby bringing cost efficiencies into the system. FDI upto 100 per cent is allowed in these companies, subject to approval by the Foreign Investment Promotion Board (FIPB).
ATC is reported to be negotiating with various national and regional telecom service providers to outsource and manage its towers. Reliance Communications has already decided to cut off its towers business into a separate subsidiary in which it is expected to bring both strategic as well as financial investors.