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India may limit foreign tower stakes
15 February 2012
Foreign tower owners may have to sell 26% stake after Telecom Regulatory Authority of India plans 74% limit
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Reliance Infratel
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Foreign holding cap at 74% may impact firms including Reliance Infratel and American Towers (ATC)
The Telecom Regulatory Authority of India has suggested reducing the foreign direct investment holding in tower firms at 74% from the current 100%, according to local reports. This recommendation, which is a part of the draft regulations, will come on a same level with other telecommunication services in the country if it is approved.
A TRAI official told the Economic Times: “We plan to bring all forms of telecom services under a unified licence regime. Existing infrastructure providers would be required to take new unified licences as soon as they come into being and the conditions in the unified licence will apply to tower companies too.”
This move, which requires government approval, will have an adverse effect on tower firm American Towers, which owns 100% of its Indian unit and will be forced to seek a local partner.
Reliance Infratel is also planning stake sales and this limit may hamper its fund-raising plans. A spokesperson at Reliance Infratel said the firm does not comment on rumours.
Umang Das, head of body representing tower companies, the Tower and Infrastructure Providers Association, said: “This will have a negative impact. After companies have come to India under a 100% foreign holding regime, policy cannot be changed. There are more than 350 smaller companies, which provide infrastructure services. They should be given a choice if they want to migrate to the new regime.” GTB
Further reading from Global Telecoms Business:
Indosat to sell 2,500 towers for $519m 09 Feb 2012
Thailand considers tower sharing licences 08 Feb 2012
Etisalat plans selling African towers 02 Feb 2012
Batelco to sell towers to fund acquisitions 06 Dec 2011
Private equity firms to buy Reliance's towers 14 Nov 2011