Sexy towers

The newest fascination in the telecom sweepstakes are towers. So what if they look ungainly, spoil the looks of a city and yet you do not get great coverage. Every operator seems to have spun off its mobile tower business into a separate entity. First Reliance Communications sold 5% stake in its tower company for Rs 1,400 crore. That puts the enterprise value of the tower company at Rs 28,000 crore ($ 7 billion).

As if that was not enough, the $ 1.4 billion American Tower Corporation (ATC)that owns or operates 22,000 telecom towers in the US, Mexico and Brazil is setting up its Asia-Pac headquarters in Delhi. It is looking at initially managing towers of Indian mobile operators. The idea is to get more operators onto each tower. At a later stage ATC it could set up its own towers or even look at acquiring a tower company.

Currently, India has 100,000 telecom towers of which 35,000 are owned by Bharti Airtel. The whole idea behind this scheme is co-locating the electronics equipment of at least two operators on a single tower. Obviously, there are major cost benefits to the operator.

But already mobile operators have outsourced their networks and their IT infrastructure. If they also manage to outsource their towers, then what is left of a telecom company? Al you need is service agreements with each of the vendors to ensure quality. And in case there are issues with coverage then the blame can be passed on to eother of the vendors.

So are mobile operators just there for branding and marketing a service? That's something i guess none of the guys who sold out of the telecom business seem to have ever considered.