Tata Merges Towers Division with Quippo Telecom

As has been long anticipated, Tata Teleservices (TTSL) has announced the details of plans to merge its tower division, Wireless Tata Telecom Infrastructure (WTTI), with Srei group's Quippo Telecom Infrastructure (QTIL).

Under the terms of the deal, Quippo will transfer its 5,000 towers into WTTI and then pay Rs 2400 crore (US$495 million) to Tata for a 49% in the enlarged firm. The valuation of the firm, at around US$2.4 billion is a significant decline on the prices being talked about last year - when valuations as high as US$4.5 billion were being mooted.

The joint venture will own around 18,000 towers, and will compete with Bharti Infratel and Reliance Infratel as well as Indus Towers, the joint venture between Bharti Airtel, Vodafone Essar and Idea Cellular.

Last April, Quippo said that it expected to invest US$3 billion in fiscal year 2008-2009 to boost its telecoms infrastructure business. The expenditure would be split along internal expansion and acquisitions, QTIL Managing Director Arun Kapur told reporters at the time.

TTSL recently sold a 26% stake in the mobile network to Japan's DoCoMo for US$2.7 billion and is due to launch GSM services later this month - to compliment its existing CDMA network.

Posted to the site on 5th January 2009