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Tower sharing to help telcos save $1.5 Billion
New Delhi: Thanks to the new practice of tower sharing and accompanying infrastructure, Indian telecom operators will now be able to save around $1.5 billion this fiscal in capital expenditure, shows an analysis of company data, reports Economic Times.
Sanjay Kapoor, CEO designate of Bharti Airtel, told Economic Times recently that the company's tower unit Bharti Infratel would spend $300 million lesser in the year to March as its networks already cover over 85 percent of the country.
Vodafone Essar sees a lower capex this fiscal due to tower sharing, Vodafone Group CEO Vittorio Colao said last week after the results were announced. Though Vodafone did not reveal the reduced capital expenditure for India, analysts estimate it to be up to a fifth of its $2.1 billion planned network expansion.
Idea Cellular too has scaled down its capex by 
1,000 crore this fiscal due to infrastructure sharing.
Mobile operators have been increasingly outsourcing services such as tower infrastructure, IT and BPO services that are not core to the business since 2008 to reduce the time to market. Due to this, companies such as Indus, GTL, which recently bought out Aircel's towers, and Tata-Quippo, now manage the network needs of many players.
Bharti, Vodafone and Idea in late 2007 had also pooled their physical infrastructure across 16 circles into Indus Towers. Reliance Communications, meanwhile, has consolidated its 50,000-plus towers into an entity called Reliance Telecom Infrastructure while the Quippo-Tata combine has around 30,000 towers.
According to industry estimates, tower sharing can reduce the overall ownership cost after accounting for the tower lease costs, by up to 23 percent. This fiscal marks the peak capex for the sector, but thanks to infrastructure sharing, all leading operators say expenditure will fall significantly in 2010-11.
1,000 crore this fiscal due to infrastructure sharing.
Mobile operators have been increasingly outsourcing services such as tower infrastructure, IT and BPO services that are not core to the business since 2008 to reduce the time to market. Due to this, companies such as Indus, GTL, which recently bought out Aircel's towers, and Tata-Quippo, now manage the network needs of many players.
Bharti, Vodafone and Idea in late 2007 had also pooled their physical infrastructure across 16 circles into Indus Towers. Reliance Communications, meanwhile, has consolidated its 50,000-plus towers into an entity called Reliance Telecom Infrastructure while the Quippo-Tata combine has around 30,000 towers.
According to industry estimates, tower sharing can reduce the overall ownership cost after accounting for the tower lease costs, by up to 23 percent. This fiscal marks the peak capex for the sector, but thanks to infrastructure sharing, all leading operators say expenditure will fall significantly in 2010-11.