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American Towers sets sights on Aircel's towers
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NEW DELHI: Nasdaq-listed American Towers (ATC) is set to join the race to buy telecom company Aircel’s 12,000-plus towers. ATC will compete
against Tata-Quippo combine and a clutch of private equity players who are set to place bids for Aircel’s towers, an industry executive tracking the development told ET.

Aircel has set July 24 (Friday ) as the deadline for all potential bidders to respond to its information memorandum, following which the telco will shortlist potential bidders, and the process is expected to take over six months, this industry executive added.

As first reported by ET last month, Aircel , majority owned by Malysia’s Maxis Communications Bhd, had put its 12,000 plus towers on the block. Some industry executives in the tower business say that Tata-Quippo combine tower co is the front- runner for the deal. Aircel will follow a bidding process and has appointed Nomura, Rothschild & Standard Chartered as advisors for the transaction . Two top telecom executives had earlier told ET that Aircel’s 12,000 towers are valued at about $1.5 billion, which is Rs 60 lakh per tower. Contradicting their views, another industry executive with a tower co said that valuations had fallen further since the Tata-Quippo merger in December 08, while adding that Aircel was likely to get only about Rs 50 lakh per tower at current rates.

When contacted, ATC said that the company ‘it does not comment on speculation’ . ATC made its first acquisition in India earlier this year when it bought out Xcel Towers which had 1,660 towers and the deal valued each tower at just over Rs 46 lakh.

Aircel is the only telco amongst large operators that has not hived off its towers into a separate entity. Towers are critical physical infrastructure that transmits voice and data signals to mobile users. All large telecom operators including Bharti Airtel, Vodafone Essar, Reliance Communications and Idea cellular have demerged their towers and other physical infrastructure into separate companies.

Industry executives say that Aircel, which has a little over $21 million customers plans to sell off its towers as it requires funds for its $5 billion expansion plan to be a pan-India operator by 2010-end . Besides, Aircel would also require additional resources if it were to bid for the upcoming 3G spectrum auctions, vital for high-end offerings on the mobile such as video conferencing and highspeed internet.

The towers space has been witnessing massive consolidation over the last 12 months. In December 2008, Tata Teleservices hived off its tower arm, Wireless Tata Telecom Infrastructure (WTTI), and merged it with Srei group company Quippo Telecom Infrastructure (QTIL). The deal valued each tower at over Rs 70 lakh and the combined entity now has about 23,000 towers making it the fifth largest telecoms infrastructure company after Indus Towers, Reliance Telecom Infrastructure , Ortus Infratel and Bharti Infratel.

Earlier this year, Essar Telecom Infrastructure , the country’s secondlargest independent telecom tower and infrastructure company was in talks with the Tata-Quippo combine as well as ATC for a possible merger, but the Ruias-promoted co was unable to clinch a deal with either of these two players.

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