Indian tower companies shifting towards fibre networks
Telco tower companies are diversifying as their base revenues from mobile operators slows down.
Telco tower companies such as American Tower and Bharti Infratel are looking to increase their investments in fibre networks and small cells to stimulate growth as their primary revenues from mobile operators slows down.
Indian financial analysts have estimated that the continent’s tower companies will need to spend approximately $10 billion to improve their fibre and small cell networks over the next five years. And this presumes that the industry realises it has to head quickly to a more data-centric model.
ATC is understood to be in the process of testing this approach in India as a whole.
D S Rawat, managing director of Bharti Infratel, the tower arm of Bharti Group, speaking on a recent earnings call, said: “That the company sees emerging growth opportunities in fibre deployment and small cells, especially for boosting indoor data coverage.
Rajiv Sharma, telecom analyst at HSBC, talking to the Economic Times, said: “Tower companies will need to spend at least $8 billion building fibre networks across the country. They will also have to find another$2 billion in small cells over the next five years “to get into new businesses like fibre leasing”, failing which they run the risk of “getting stuck in a low growth rut”. Their primary lifeline, rental revenue from telcos, is slated to grow at a modest 9% a year over the next five years,” he said.
All of these companies will have to convert their existing backhaul networks from microwave to fibre-based so that they can handle surges in data flows. This is because microwave is considered to be less effective in 3 and 4G environments.