Leading U.S. wireless tower operator
American Tower Corp.
) is likely pursuing the acquisition of Indian wireless tower
operator Viom Networks. Viom currently operates around 41,000
towers and about 1,000 more are under construction, supporting
more than 95,000 tenancies.
The company is majority controlled by Tata Teleservices
together with Srei group's Quippo Telecom Infrastructure and some
private equity firms. Industry sources predicted that the deal
size could reach up to $1.77 billion, excluding around $1.16
billion of outstanding debt.
India offers some of the cheapest mobile call tariffs in the
world. Such competitive pricing has significantly affected
margins and network upgrade plans of wireless service providers.
As a result, mobile operators in the country are tending
towards more towers sharing and leasing to save costs. This makes
India a lucrative market for wireless tower operators.American
Tower already owns over 10,000 towers in India.
The wireless tower sector in India is undergoing a wave of
consolidation. Smaller players are considering mergers or
complete sell-out to large global tower operators since these
companies lack the wherewithal to take on their larger
Last financial year (ended Mar 2013), Viom reached
profitability for the first time. Many industry researchers
expect Viom to increase profit in the current financial year
(ending Mar 2014).
Globally, mobile subscriber growth has significantly boosted
the wireless tower industry. Moreover, future financials are
likely to be propelled by strong demand for wireless voice,
broadband wireless data and video networks, which require more
tower space. Deployments of 4G mobile networks necessitate the
expansion of coverage and infrastructure by carriers.
Verizon Communications Inc.
) started deploying LTE from the end of 2010 and
) started it from mid-2011. Moreover, the 9-year Master Lease
Agreement signed with
) will further boost top-line growth of American Tower. American
Tower currently has a Zacks Rank #3 (Hold).
AMER TOWER CORP (AMT): Free Stock Analysis
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