ATC acquires 51% in Viom's tower business for around Rs7,600 cr

American Tower Corp is acquiring a 51-per cent stake in India's in Tata Teleservices' subsidiary Viom Networks, in a deal which values the tower network at Rs19,000-20,000 crore, including debt of around Rs6,500 crore.

Viom owns and operates about 42,000 mobile phone towers and the combination with ATC, currently a marginal operator in the telecom tower business in India, will make the merged entity the third largest tower company in the country.

Following the Viom Networks-ATC deal, the combined entity's total number of towers will stand at 55,769.

Currently Indus Tower, a three-way venture among Bharti Airtel, Vodafone and Idea Cellular is the largest telecom tower operator in India with 115,942 towers and a tenancy ratio of 2.19.

This is followed by state-owned BSNL with 65,000 towers and Reliance Infratel, with 42,600 towers and additional 1,000 towers under construction (Reliance Infratel has the best tenancy ratio at 2.35).Viom currently is at number four position

Viom is majority owned by mobile phone service provider Tata Teleservices Ltd, with Kolkata-based SREI Group owning about 18 per cent. Viom's other shareholders include Singapore state investor GIC, Macquarie SBI Infrastructure Fund, Oman Investment Fund and IDFC Private Equity.

The balance 10-15 per cent stake will be held by the PE players. Some of these like Funderburk Mauritius are likely to exit as their seven-year gestation period is over.

The deal, according to sources, will be structured in such a way that ATC, which currently has 13,169 towers with one of the lowest tenancy ratios of 1.90, will acquire majority stake along with management control.

Post the deal, ATC will continue to get tower leasing contracts from TTSL on a preferential basis.

Though TTSL has the majority stake, management control is with the Srei Group. After the deal, Srei will exit the venture while TTSL will retain a stake of 30 per cent.

Currently, Viom has a market share of 11.30 per cent of customers and revenue share of 14.80 per cent, while ATC's shares are at 3.49 per cent and 3.7 per cent, respectively.