NSR, IL&FS telco tower operators to merge

NSR, which focuses on growth capital investments on the Indian subcontinent, with $1.4 billion under management, made its initial investment into Ascend in July 2007, buying a 73% stake. ITIL, meanwhile, is jointly owned by IL&FS and TVS Interconnect Systems, a part of the TVS Group.

Ascend and ITIL have been labeled as two of the smaller groups in their space in India, but the combination of the two may help them to compete against the bigger players that have also undergone consolidation movements of their own, including the merge of Tata and Quippo; the purchase of Aircel's towers by GTL; and American Tower's acquisition of Essar Telecom Infrastructure, Transcend Infrastructure and Xcel Telecom Pvt Ltd. Ascend and ITIL are independent telco tower operators whose combined customers include nearly all of India's mobile operators, including Aircel, BSNL, Idea Cellular, Tata Teleservices and Vodafone.

Pending approval by Indian regulators, the merged outfit will operate approximately 4,000 towers. They will also jointly continue their R&D work, which includes energy-management research to reduce expenses and carbon emissions from telecom towers.

The companies did not disclose the proposed shareholding breakdown going forward, though Chairman of TVS Interconnect Systems R. Haresh said in a statement that the merger of ITIL and Ascend "provides all the stakeholders of both companies' enormous benefits in terms of an enlarged management team, increased scale, a pan-India footprint and significant operational efficiencies."

The deal comes as India experiences a mobile and wireless communications boom unlike anywhere else. According to Deutsche Bank analysis, India claims 752 million mobile phone users as of February 2010 - approximately 150 times the number of users India in 2001. The subcontinent trails only China in terms of wireless users. Gartner Inc. has predicted that Mobile market penetration will increase 82% by 2014, mainly due to the service providers increasing their focus on the rural market and lower handset prices.

"Over the last decade, voice telephony in India has grown at a phenomenal pace and we are now at the cusp of another revolution in data usage with tablets, net books and smart phones as the key enablers," Founding General Partner and CEO of NSR Parag Saxena said in a release.

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• Topics
• South Asia
• Media
• NSR New Silk Route Partners
• IL&FS Investment Managers