Vodafone, Bharti and Idea announce formation of Independent Tower Company in India

Vodafone, Bharti and Idea announce formation of Independent Tower Company in India

New independent tower company - Indus Towers - to propel the mobile sector towards achievement of the Indian Government's teledensity goals and broader rural coverage. Indus Towers to provide passive infrastructure services to all operators on a non-discriminatory basis. Indus Towers will enable optimisation of future tower rollout and enhanced operational efficiency leading to opex and capex savings for its customers

The Indian consumer will benefit through improved network reach and quality, more choice and significantly greater access to mobile services across the country. This is a major step towards achieving the Indian Government's vision and TRAI's recommendations for passive infrastructure sharing and will create a lower cost and more competitive operating environment for mobile operators in India.

Vodafone Essar - a subsidiary of Vodafone Group Plc, Bharti Infratel Limited and Idea Cellular Limited today announce that they have agreed to form an independent tower company, Indus Towers Limited, to provide passive infrastructure services in India to all operators on a non-discriminatory basis. This follows the infrastructure sharing Memorandum of Understanding signed between Bharti and Vodafone in February 2007.

The three companies will each merge their existing passive infrastructure assets in 16 circles in India. Vodafone Essar and Bharti will own approximately 42% each and Idea will own the remaining 16% stake in Indus Towers. New passive infrastructure rollout in the 16 circles will be undertaken by Indus Towers.

This transaction highlights Vodafone Essar, Bharti and Idea's commitment to enhancing the sharing of passive infrastructure and takes a firm step towards delivering on the Telecom Regulatory Authority of India's (TRAI) recommendations on infrastructure sharing. The primary benefit will be the accelerated expansion of coverage, especially into rural areas, and enables wider access to affordable services for all, helping to meet the Indian Government's teledensity targets. Indus Towers welcomes all operators to become customers. While these operators will continue to run their active infrastructure completely independently, they will be able to enjoy capital and operating expenditure savings, enhanced operational efficiency and quicker expansion of coverage.

Indus Towers will be an independently managed and operated company, offering services to all telecom operators and other wireless services providers such as broadcasters and broadband services providers. Indus Towers will have approximately 70,000 sites at inception providing it with significant scale benefits, and will undertake a significant rollout of telecom infrastructure to propel the mobile sector towards achieving India's teledensity and rural coverage goals within the next few years.

The formation of Indus Towers will enable telecom operators to reduce operating costs through economies of scale. The Indian consumer will be the ultimate beneficiary of this initiative through improved network quality and broader coverage especially in rural areas.