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South Asia News

Mobile Tower Companies to Invest over Rs 2 trillion by 2025

Image Credit: BGR India

Mobile tower companies are likely to invest over Rs 2 trillion by 2025. Almost half of this will be in the next two years, to help meet the telecom firms’ target to take 5G to 50 per cent of India.

According to data provided by the Digital Infrastructure Providers’ Association (DIPA), the apex body of the tower companies.

While the focus so far has tended to be on the investment of around Rs 2-3 trillion, which telecom companies have to make for rolling out 5G, the tower companies will also have to spend about the same amount to enable high-speed services, according to a Business Standard report.

The investment by tower companies will include the deployment of the crucial small cells, which are key to the success of 5G. The small cells help in the densification of the network and are mounted on public and residential infrastructure, such as poles, or street furniture, such as bus stands.

They provide huge bandwidth capacity, especially in highly populated areas. Larger towers will also need to be added to take care of the expected data explosion. The telecom tower industry, apart from BSNL, is dominated by three players: Indus Towers, which has merged with Bharti Infratel, the American Tower Corporation, and the Brookfield-Reliance combine. Investment in the fabrisation of towers is also needed as 5G requires a large amount of data to be backhauled.

The bill will come to Rs 5-7 trillion by 2025, according to DIPA estimates. India already has over 727,000 towers and 100,000 small cells deployed commercially.

DIPA estimates that the need for network densification for 5G will entail the deployment of 1,000 base stations every square kilometre.

The densification would include backhaul radios, antennas, and tower street furniture, among others. To cover half the country, 500 small cell deployments every square kilometre will be needed.

Small cells come in different shapes and sizes and have the capacity to serve anything between 8-200 users and cater to a vicinity ranging from 50-2,500 metres. Small cell proliferation can happen, according to DIPA, if the public infrastructure is available.

For instance, it has already made representations to the government asking for permission to use electricity poles to reduce capex expenditure.

Consultations with Stakeholders

The Telecom Regulatory Authority of India is holding consultations with stakeholders on the possible use of street furniture for installing small cells.

The report further added that the telecom infrastructure players say the business is stable and as everyone signs up long-term tenancy contracts with telecom companies, there will be assured returns on investment.

“The business is break-even at 1.5 tenancy. With consolidation (there are three players in the market), as well as infra-sharing happening, we expect to hit a tenancy of two, which assures reasonable returns,” said an executive with a leading tower company.

Analysts at ICICI Securities said that in the initial stages, Indus Towers expects the 5G roll-out to be large, but it will happen through loading; this means that existing tenants will load 5G equipment at these sites.

As 5G sites are bulky and require more energy solutions, loading charges will go up. Tower company executives also point out that while the government decision to provide e- spectrum to operators in the interim will replace slower legacy microwave backhauls with faster ones and enable 5G, the fact remains that towers with fibre backhaul will still be needed.

Traditional microwaves can provide speeds of only 500 Mbps to 1 Gbps while the e-band is better (1-1.25 Gbps) to achieve capacities of 10-20 Gbps.

India’s 5G auction of telecom spectrum received a record Rs 1.5 lakh crore of bids, with Mukesh Ambani’s Jio emerging as the top bidder with a bid of Rs 88,078 crore.

The auctions and spectrum top-up by companies will pave the way for a better quality of services for consumers across the country, he added. The 5G services will be launched by October.

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  • August 16, 2022
Author Info - W.Media
Anuradha Nagar
Anuradha Nagar
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