Quippo Telecom Infrastructure Limited (QTIL), the telecom infrastructure arm of SREI Group has picked a 49 percent stake in Tata Teleservices’ (TTSL) tower arm, Wireless-TT Info-Services Limited (WTTIL). The deal will involve Quippo Telecom transferring its 5,000 tower assets as well as funds amounting Rs 2,400 crore in lieu of 49 percent stake.

The deal will result in the tie-up having 18,000 towers which will soon be scaled to 22,000 by this year and further to 50,000 by 2012.

Post deal, the management control rights will be passed on to QTIL to maintain the independent status of the operations. The tie-up claims the deal makes it the largest independent telecom infrastructure firm in India which is not managed directly by any telco. An independent Chairman will be appointed to govern the firm. 

The move is widely perceived as a consolidation move by the industry. Earlier Idea, Airtel and Vodafone had together formed Indus Towers. Such deals are coming a trend in the infrastructure industry which is expected to do well post entry of new operators.

Quippo and TTSL were reported to be in talks since last year for a possible merger deal.

“The deal is of strategic importance and value enhancing for all stakeholders-particularly so since it combines the proven expertise of management and operational capabilities of QTIL with the committed support of TTSL. Also, the Independent Board will ensure high standards of Corporate Governance and a Business Code of Conduct, similar to what is followed in various Tata companies,” said Anil Sardana, MD TTSL.

“When Quippo pioneered the concept of shared passive infrastructure in 2005, there were no takers. Now, through this merger, the dream is being realized-resulting in a win-win situation for customers and stakeholders of Quippo and WTTIL, This partnership presents a unique opportunity for telecom operators to focus on their core competencies without worrying about the availability of infrastructure, capital expenditure, time-to-market, etc. This in turn, will reduce risks and improve profitability,” said Sunil Kanoria, Director, QTIL and Vice-Chairman and MD, Quippo Infrastructure Equipment Limited. 

Arun Kapur, MD of QTIL said, “This deal is a testimony of the faith of our customers and stakeholders in our business strategy. This largest independent tower company will organically grow into an entity with over 50,000 towers by 2012-we are confident it will hold the largest tenancy ratio in the Indian telecom space as well.”

Citi and Nomura served up as financial advisors for TTSL while JM Financial acted as advisors for Quippo Telecom.