New Delhi: Bharti Infratel has said that telecom consolidation, particularly the Vodafone-Idea merger, will lead to short-term rationalisation in tenancies.
But the independent tower company of the Bharti Group is of the view that few strong and willing participants are "good" for the tower industry in the long run. "As far as tower industry is concerned, such consolidation, especially Voda-Idea merger, which may still be some time away if it fructifies will inevitably lead to short term and one-time rationalisation in tenancies," Bharti Infratel Chairman Akhil Gupta said in the company's annual report for 2016-17.
The consolidation leading to "few but strong and willing participants" will however benefit the tower industry in medium-to-long term, as compared to large number of small or unwilling operators with no financial muscle or passion to invest in data network rollouts, he added.
The company believes that any reduction in revenue on account of the overlaps will be adequately offset by the exit charges and incremental revenue flowing in on account of rapid rollouts by operators. Terming the year 2016-17 as a "transformational" one, Gupta said that the telecom industry witnessed continued growth in subscribers, higher adoption of data services aided by spurt in smartphone penetration and deeper coverage of data networks.
Operator consolidation continued to grab headlines last fiscal with announcements on Vodafone-Idea merger, Reliance Communications-Aircel-MTS merger, and Airtel's acquisition of Aircel and Videocon spectrum along with Tikona’s 4G business and Telenor India business.
Gupta exuded confidence that demand for data is set to grow exponentially with India decisively embracing the 'digital world'. "This augurs well, despite temporary setbacks, for telecom industry and thereby telecom infrastructure industry in long term," he added.