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Conclusively, sharing infrastructure has clearly emerged as a key sector among the Indian telecom industry, and this is now a key growth strategy for new operators. Prakash Ranjalkar, CEO and Whole time Director GTL Infrastructure Ltd
On the current market
China and India continue to drive the telecom market in the Asia Pacific region. In the next five years mobile subscriptions are expected to grow strongly, driven mainly by basic voice service needs in these regions. In anticipation of an increase in subscriber base and uptake of mobile broadband services, operators across the world made plans for incremental investments in capacity and coverage expansion. Worldwide, service providers spent US$ 287 billion in 2009 on capital expenditure projects, such as network infrastructure expansion and upgrades.
Beginning in 2010, the investment cycle is expected to accelerate, driven by 3G rollouts in India, Central and Latin America, and Africa, and a ramp-up in long term evolution (LTE) deployments in Australia, Brazil, Western Europe, Japan, and North America.
In tune with the telecom growth, the telecom towers market is also expected to grow. The Indian telecom towers market is growing at a faster pace than the other markets.
On the factors driving the growth of the market
India has a subscriber base of 629 million subscribers, as of June 30, 2010, which according to industry estimates will reach 990 million by 2015. This would lead to a requirement of 426,000 telecom towers over the next five years, translating into an additional demand of approximately 93,000 towers (Source: CLSA research report).
Continued subscriber growth has resulted in a significant increase in network loading. This, coupled with spectrum shortages, has resulted in capacity roadblocks for operators. As such, telecom operators are facing the tough task of sustaining revenue growth and profitability, which in our view would lead to more reliance on tower sharing.
Operators need to invest in 3G rollout as well. We believe that the combination of all of these factors will be the key growth engine for the Indian tower sector.
On trends in the market
A few years back we saw a lot of consolidation...