Tata Teleservices and Quippo Telecom Infrastructure announced the merger of their passive infrastructure businesses to create India’s largest Independent Telecom Infrastructure Company called Wireless-TT Info-Services Limited (WTTIL).

Under the terms of this strategic partnership, Tata Teleservices Limited and Quippo Telecom will swap 51 per cent and 49 per cent stake, respectively, in the infrastructure business held by them. The management rights in Wireless-TT Info-Services Limited (WTTIL) – the tower arm of Tata Teleservices – shall now move over to an independent and professional management run by Quippo Telecom, to make it a truly independent tower operator without being managed by a Telco.

Quippo will make an upfront cash payment of approximately Rs.2,400 crore, as also transfer its passive telecom tower portfolio of approximately 5,000 towers to WTTIL. The combined entity will, therefore, have a portfolio of over 18,000 towers, thereby making it the largest independently managed tower company in India, with an enterprise valuation of approximately Rs.13,000 crore (US$2.6 billion).

“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, Managing Director of Tata Teleservices Limited.

“This partnership makes for perfect fit – Quippo is one of the most professionally-managed companies in this space and WTTIL is the epitome of Corporate Governance. Furthermore, this alliance will allow TTSL to concentrate on its core area of expertise. Together, we will enhance the value proposition and shareholder value. The combined entity will reap the benefits of significant synergies through combining of portfolios – both at the operational and financial levels. This will help further increase scale and reach, while ensuring better asset utilization, an upside in tenancy and reduction in capital expenditure,” Sardana added.

“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,” Sunil Kanoria, Director, Quippo Telecom Infrastructure Limited, and Vice-Chairman & MD, Quippo Infrastructure Equipment Limited, said. “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.”

Arun Kapur, Managing Director of Quippo Telecom Infrastructure Limited, 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 the year 2012. We are confident it will hold the largest tenancy ratio in the Indian telecom space as well.”

Quippo Telecom pioneered the concept of shared passive infrastructure and is the first independent tower company in India and one of the most aggressive in the space. The financial advisors of the partnership are Citibank and Nomura for Tata Teleservices Limited and JM Financial for Quippo Telecom.