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Q - Do the terms ‘tower’ and ‘cellsite’ mean the same ?

A - The term ‘tower’ signifies the physical structure of a Telecom tower and ‘cellsite’ signifies the Telecom tower and associated electronics & infrastructure. But these terms are interchangeably used in common industry parlance.

Q - What is the business of GTL Infra ?

A - GTL Infra is in the business of provisioning passive infrastructure at cellsites on a shared basis to multiple operators. GTL Infra is the largest neutral and independently managed tower Company in the world. Key achievements of the Company are as below:

  • Only listed Tower Company in India since 2006
  • Only Neutral & Independent managed Tower Company
  • Pan-India presence of 27,839 towers as on March 2015
  • All operators served on GTL Infra sites
  • Fastest growing tower Company in the world
  • Tower CAGR 130% over last 5 years
  • Successfully acquired Aircel towers for US$ 1.8 Bn in India’s largest all cash deal

Q - What does independent tower Co mean?

A - An Independent and Neutral Telecom tower Co is the one which is not affiliated to any operator in the industry. Independent tower companies across the world enjoy high tenancies on their towers. This is because independent status enables them to avoid conflict of interest with other operators and build towers at the most sharable sites, without having to follow the network footprint of any particular operator. GTL Infra is the largest third party and Independent Telecom Tower Company in India. GTL Infra has a vision to have the highest tenancy on its tower in the Indian telecom industry.

Q - What is the current availability of tower and what is the expected demand for towers in future?

A -

Q - A Brief on Aircel Tower Acquisition

A - GTL Infra has acquired telecom tower assets of Aircel in an all cash deal valued at Rs 8,026 Crs (US$ 1.8 Bn). The highlights of the transaction were as follows:

  • Purchase of 17,500 telecom towers;
  • 21,000 active tenants on these towers;
  • Transaction value of Rs. 8,026 Crores;
  • Commitment of additional 20,000 sites to GTL Infra over next three years from Aircel Limited;

Q - What is the Rationale for Aircel tower Acquisition?

A - Revenue Opportunity

  • The deal assures immediate revenue of Rs. 700 Crs. p.a. for next 15 years
  • Further, GTL Infra has also received additional commitment of 20,000 tenancies over a period of next 3 years which may generate additional revenue of Rs. 700 Crs. p.a. basis

Complementary Network footprint

The deal has strengthened GTL Infra’s presence in all the 22 Telecom circles. GTL Infra has strong presence in Northern and Western India whereas Aircel’s towers are predominantly located in the Southern and Eastern part of the country .

Increased presence in urban areas to cater to new 2G/3G operators

The deal enables strengthening of foothold in Metros and Class A circles. This translates into an opportunity for the Company to capture the demand generated by 2G and 3G operators in these areas.

Q - What does a typical cellsite comprise of ?

A - A cell site has active and passive infrastructure components. Active component includes the antenna, transceivers, feeder cables and microwave radio equipments. Passive components include the land, tower, shelter, air conditioning equipment, diesel electric generator, battery, electrical supply, technical premises and easements etc.

Q - Why will the Cellular Operators in India prefer to share towers?

A - The chief drivers for growth in demand for towers are as follows:

1) Pan India roll out of 3G & BWA

After successful closure of 3G/BWA auction the winners have begun the rollout of services in their respective circles. The 3G & BWA spectrum has been allotted on higher frequency of 2100 Mhz and 2300 Mhz respectively. High license cost, rollout obligations, need to maintain high quality network for 3G & BWA services will drive the demand for towers.

2) Spectrum scarcity

As against global average of spectrum availability of 25 MHz per operator India has an average of around 6 MHz per operator. The Operators will try to compensate low spectrum availability by increasing the point of presence of towers .

3) Rural expansion

India is the fastest growing telecom markets in the world with monthly subscriber net-adds in excess 18 Mn. This is being led by the rural market accounting for 163 Mn subscribers and 40-45% of net additions. Operators seeking to make inroads in rural areas will look for ready base of towers to enable faster rollout in semi urban and rural areas.

4) Mobile Network Portability

Mobile Network Portability is being launched pan-India in a phased manner. With competitive telecom tariff not being a strategic advantage to telecom operators; better network services will drive subscriber movement for new Operators. With expanded subscriber base and spectrum crunch, incumbent Operators will be left with little option but to improve the Network quality to retain their subscribers. This will drive the demand for new towers in urban areas .

Q - Who are the constituents of the Indian tower sector?

A - Tower companies in India can be mainly classified into three groups viz.
1) Operator owned Tower companies (Bharti Infratel, Reliance Infratel)
2) Operator owned Joint ventures (Indus, VIOM)
3) Independent Tower companies (GTL Infra, Essar Towers, ATC-Xcel etc.)

Q - What is the current number of towers in India and what will be the demand for towers in the future?

A - As of 31st MARCH 2015, the country is estimated to have ~ 27,839 towers.

Q - How are locations for towers selected?

A - The company has adopted a tower rollout strategy which aims at their better utilization. The company develops sites which are backed by ‘Service orders’ received from the Operators who will be the ‘Anchor tenants’ on them. The location co-ordinates of a site are given by the Operator, and are analyzed by the company for share-ability potential. The location analysis involves mapping the presence of towers in vicinity of the proposed location, coverage prediction, Line of Site prediction for microwave backhauling, etc. The company prioritises those sites which have multiple tenant demand, to get better returns on its investment.

Q - Expenses involved in this business

A - The major elements of cellsite operating expenses include monthly rentals for underlying land, cellsite O&M expenses and Energy & Fuel expenses. Cellsite O&M expenses consists primarily of repairs and maintenance charges for cellsite components, Annual Maintenance Charges (AMC) , rates and taxes and security expenses.

The Energy & Fuel expenses to operate a cellsite are reimbursable from Operators and are apportioned equally among all tenants. Overhead expenses for cellsite O&M include selling, general and administrative (SGA) expenses to support the services.

Q - What were the latest financial results of the company ?

A - Please refer the Latest Annual Report

Q - Does GTL Infra pay any dividend ?

A - The company aims to maintain balanced capital efficiency through investment to meet the requirements of its growing business, undertake selective acquisitions and at the same time return cash to the shareholders.

Under the SEBI and Companies Act regulations, currently the company is not eligible to declare dividends.

Q - Where is the stock listed and what is the stock code/symbol ?

A - The stock is listed on BSE and NSE. The stock code for BSE is 532775 and NSE is GTLINFRA.

Q - What does the ‘Quiet/Silent period’ for the company mean ?

A - The Quiet/Silent period for the company in every quarter denotes the period between the date of sending of notice of quarterly results to the Stock exchange by the company and the date of announcement of Results. In this period, the company’s Investor relations/Corporate Communications team is restricted from meeting the analysts or commenting on the company’s performance or results.