Vodafone, Bharti and Idea announce formation of Independent Tower Company in India
New independent tower company – Indus Towers – to propel the mobile sector towards achievement of the Indian Government’s teledensity goals and broader rural coverage
Indus Towers to provide passive infrastructure services to all operators on a non-discriminatory basis
Indus Towers will enable optimisation of future tower rollout and enhanced operational efficiency leading to opex and capex savings for its customers
The Indian consumer will benefit through improved network reach and quality, more choice and significantly greater access to mobile services across the country
This is a major step towards achieving the Indian Government’s vision and TRAI’s recommendations for passive infrastructure sharing and will create a lower cost and more competitive operating environment for mobile operators in India.
Vodafone Essar – a subsidiary of Vodafone Group Plc, Bharti Infratel Limited and Idea Cellular Limited today announce that they have agreed to form an independent tower company, Indus Towers Limited, to provide passive infrastructure services in India to all operators on a non-discriminatory basis. This follows the infrastructure sharing Memorandum of Understanding signed between Bharti and Vodafone in February 2007.
The three companies will each merge their existing passive infrastructure assets in 16 circles in India. Vodafone Essar and Bharti will own approximately 42% each and Idea will own the remaining 16% stake in Indus Towers. New passive infrastructure rollout in the 16 circles will be undertaken by Indus Towers.
This transaction highlights Vodafone Essar, Bharti and Idea’s commitment to enhancing the sharing of passive infrastructure and takes a firm step towards delivering on the Telecom Regulatory Authority of India’s (TRAI) recommendations on infrastructure sharing. The primary benefit will be the accelerated expansion of coverage, especially into rural areas, and enables wider access to affordable services for all, helping to meet the Indian Government’s teledensity targets. Indus Towers welcomes all operators to become customers. While these operators will continue to run their active infrastructure completely independently, they will be able to enjoy capital and operating expenditure savings, enhanced operational efficiency and quicker expansion of coverage.
Indus Towers will be an independently managed and operated company, offering services to all telecom operators and other wireless services providers such as broadcasters and broadband services providers. Indus Towers will have approximately 70,000 sites at inception providing it with significant scale benefits, and will undertake a significant rollout of telecom infrastructure to propel the mobile sector towards achieving India’s teledensity and rural coverage goals within the next few years.
The formation of Indus Towers will enable telecom operators to reduce operating costs through economies of scale. The Indian consumer will be the ultimate beneficiary of this initiative through improved network quality and broader coverage especially in rural areas.
VODAFONE is a trade mark of the Vodafone Group. Other product and company names mentioned herein may be the trade marks of their respective owners.
Cautionary statement regarding forward – looking statements
This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our expectations and plans, strategy, management’s objectives and future performance, including statements relating to expected benefits associated with the transactions contemplated herein. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as “anticipates”, “aims”, “due”, “could”, “may”, “should”, “will”, “expects/expected”, “believes”, “intends”, “plans”, “targets”, “goal” or “estimates”.
By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to: regulatory approvals that may require acceptance of conditions with potential adverse impacts; risk involving our ability to realise expected benefits associated with the transactions referred to herein; and the continued growth in the market for mobile services and general economic conditions in India.
Notes to Editors
Vodafone is the world’s leading international mobile communications group with over 241 million proportionate customers as at 30 September. Vodafone currently has equity interests in 25 countries across five continents and a further 39 partner networks worldwide. For more information, please visit http://www.vodafone.com
About Vodafone Essar
Vodafone Essar is the Indian subsidiary of the Vodafone Group and has operations in 16 circles with 37.2 million customers. Vodafone has partnered with the Essar Group as its principal joint venture partner for the Indian market. For further information, please visit http://www.vodafone.in
About Bharti Infratel
Bharti Infratel, is a subsidiary of Bharti Airtel Limited, India’s leading integrated telecom services provider with an aggregate of 53 million customers as of end of October 2007, consisting of over 50 million mobile customers. Bharti Airtel has been rated among the best performing companies in the world in the BusinessWeek IT 100 list 2007. For further information, please visit http://www.bhartiairtel.in
Idea has a customer base of over 20 million and covers approximately 60% of India’s telecom population in 11 circles. Idea also has licenses for Mumbai and Bihar. It is part of the Aditya Birla Group. For further information, please visit http://www.ideacellular.com
About the terms of the agreement
In the event that any party to the agreement establishing Indus Towers, fails to contribute some or all of its tower assets in the 16 circles to the company, the shareholding of the relevant shareholder will be reduced.
About passive infrastructure
Includes the towers, shelters, cooling systems, AC and DC power supply, diesel generators, air conditioning, site leases and other electrical and civil works in relation to a mobile telecommunications network that enables a mobile communications operator to install the active infrastructure such as base terminal station equipment, associated antennas and backhaul connectivity to a mobile telecommunications operator’s network at such telecommunications site.
About active infrastructure
Includes base terminal station equipment, associated antennae, backhaul connectivity to a telecom licensee’s network and other requisite equipment and associated electrical and civil works required to provide telecom services by a telecom licensee at a telecom site.
About 16 Circles
16 circles refer to the following 16 service licence areas in India: Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Kolkata, Maharashtra, Mumbai, Punjab, Rajasthan, Tamil Nadu, Chennai, U.P. (East), U.P (West) and West Bengal.
For further information:
Tel: +44 (0) 1635 664447
Tel: +44 (0) 1635 664444