Page 89 - IACC Newsletter March-April 2014 Issue 03

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verbally been mandated by the Tata group and SREI to sell part of the company to raise funds. Credit Suisse, Citigroup and
American Tower declined to comment. Tata group and SREI didn't respond to emails seeking comment.
A Viom spokesman denied any talks with American Tower, but said the company has engaged financial advisers to explore
options to raise capital. "Some of the advisers have indicated a valuation range of Rs 22,000 crore to Rs 27,000 crore.
They will assist Viom Networks' board in evaluating appropriate avenues," he said. The deal talks reflect a revival in
investor interest in the telecom infrastructure segment. India's telecom sector, which has been the fastest growing
globally until a few years ago, hit a trough with the Supreme Court in early 2012 cancelling as many as 122 permits issued
in 2008.
The resultant drop in demand for towers as well as slowdown in new customer additions hit telecom infrastructure
companies badly. But the success of the recent spectrum auction has boosted expectations of a spurt in demand as
telecom operators are likely to aggressively rollout data services which will require a large number of signal-emitting
tower sites.
American Tower, which has around 10,000 towers in India, was looking to reduce the count last year. But, encouraged by
the success of the spectrum auction, the company is again looking at expanding its India footprint, especially as growth
elsewhere has stagnated, one of the people said. Viom currently has around 41,000 towers and about 1,000 more are
under construction. It gets around 40 per cent of its revenue from Tata Teleservices while the rest comes from Uninor,
Aircel and Vodafone India.
Indus Towers is the market leader with more than 1, 10,000 towers. American Tower acquired 1,700 towers from Xcel
Telecom in 2009. The companies did not disclose the value of the transaction, but people with knowledge of the deal said
it was worth around Rs 700 crore.
In 2010, American Tower bought 4,450 towers from the Essar group for Rs 2,000 crore. At the time, the company had
valued the deals based on the number of towers. A person familiar with the company's financials said Viom, which posted
a maiden profit last financial year, would likely post Rs Rs 5,000 crore of revenue including pass-through costs such as fuel
and electronic maintenance in the fiscal year through March 2014.
This person expects it to post an operating profit of Rs 1,900 crore and a net profit of aroundRs 80 crore.
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