Bharti took the lead by unlocking value in its tower arm, Infratel, in a billion dollar transaction. This showed the way for others like Reliance Communication and Idea to also divest stakes.
But the power of these towers are all set to multiply. Their valuations set to jump.
The new 3G policy and the soon-to-be finalised MVNO recommendations would mean there will be many new tenants for these critical backbone support.
A case in point is Tata Teleservices, which has been looking to divest 49 per cent stake in its tower company. Its price expectations have gone up from its earlier valuation of $2.5 billion for 8000 towers.
"Certainly. The new opportunities in active and passive infrastructure sharing increases the value of tower business,” said Anil Sardana, MD, Tata Teleservices.
Analysts believe that while 3G and even the entry of new licensees in the southern states will increase the number of tenants per tower, mobile virtual network operators will ensure that towers are much better used.
Indus Towers, a JV between Bharti, Vodafone and Idea has 75,000 towers and already has a valuation of more than $12 billion.
Reliance Infratel with around 36,000 towers is worth between $6-8 billion.
And it is these tower companies which are expected to reap maximum benefits pushing up the valuation of its parent telecom companies who in most cases are the promoters with the highest stakes.
"The tower business will see further increase in valuation because 3G and wimax will provide new opportunities to all the players,” said Mahesh Prasad, President-Applications, RCom.
Mobile players in India are expected to add 1 lakh more towers by 2010 and just at a time when it seemed that the telecom tower space was getting too crowded changes in government policies have revived the bullishness in the sector.