Investment funds KKR & Co., Stonepeak Partners and Macquarie Capital have sounded merchant bankers to acquire a potential stake in India’s No. 3 telecom tower company, Ascend Telecom Infrastructure Pvt. Limited. Ltd, two people aware of the development said, after losing the race for American Tower Corp.’s assets in India to Canada’s Brookfield.
The funds are interested in starting talks with U.S.-based Global Infrastructure Partners’ wholly-owned tower company, the people cited above said on condition of anonymity.
“They have approached bankers and asked them to evaluate the interest of the developers. “The first talks are expected to take place in the coming weeks or months, but a final agreement is likely to be reached in four to six months,” said one of the people directly involved in the discussions, who asked not to be identified. .
India has more than 809,000 telecom towers and industry estimates say the number is growing 7% annually.
A deal could be finalized quickly given the funds’ strong interest in the Indian tower market, the second person added. The three funds were reportedly on the list of initial suitors for ATC’s assets in India.
Queries sent to KKR & Co and Ascend Telecom remained unanswered. Macquarie Capital and Stonepeak declined to comment. Global Infrastructure Partners said it was not looking to exit Ascend.
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The telecom infrastructure space has attracted interest from global infrastructure, sovereign and venture funds in recent years. India has more than 809,000 telecom towers and industry estimates say the number is growing 7% annually.
Telecom service providers Reliance Jio and Bharti Airtel are strengthening their 5G capabilities and deepening broadband penetration beyond urban markets. Newly funded Vodafone Idea and state-owned Bharat Sanchar Nigam Ltd will also roll out their 4G and 5G services. Further expansion in rural and semi-urban areas will also drive demand for new towers, as well as small cells to improve coverage and capacities. This segment of the market is expected to see improvement in the coming years, attracting investor interest.
Ascend, what counts Bharti AirtelVodafone Idea, Reliance Jio and BSNL among its clients, it has around 18,600 towers with 30,800 leases. It also provides high-power small cell sites, fiber to the home and to the node, intermediate stations for national long-haul fiber optic routes, and edge data center infrastructure.
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reported a profit of $192.90 crore in the June quarter against a loss of $26.70 crore a year earlier. Revenue increased by 12.17% to $292.10 million rupees $260.40 crore in the same period.
Last year, Ascend acquired Gurugram-based Tower Vision India Pvt. Ltd. Ltd which had around 9,000 towers for $365 million, making it the fourth largest at the time.
ATC’s exit in India marked Brookfield’s third tower acquisition in India. It entered the sector in 2020 by acquiring 175,000 towers from Reliance Industrial Investments and Holdings Ltd, and named it Summit Digitel. It has since acquired Space Teleinfra Pvt. Ltd. Ltd’s 6,300 sites, providing indoor solutions and outdoor small cell solutions for $900 crores in 2021-22. The company is called Crest Digitel.
Brookfield, along with its partners BCI and GIC, last month bought the portfolio of 76,000 towers from the then third-largest player ATC India. All its telecom infrastructure assets, including Summit Digitel, Crest Digitel and ATC India, will be hosted under a new brand called Altius, with a total portfolio of 257,000 towers, making it the largest tower service provider in India .
Until the Brookfield-ATC deal, Indus Towers, which is majority owned by Bharti Airtel, was the leader in India’s tower market with 226,000 towers. It was created through the merger of the former Indus Towers and Bharti Infratel in 2019-20.
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