GTL Infra hopes to get 2,000 crore in cancellation fees from 3,987 rentals
Telecommunications tower company GTL Infrastructure expects to rake in around 2,000 crore yen in compensation for the cancellation of 3,987 rentals with telecom operators shutting down as part of industry consolidation . GTL will also earn another ₹ 120-300 crore by reducing infrastructure operating costs.
GTL Infra, which has successfully emerged from a Strategic Debt Restructuring (SDR), would use the proceeds to repay the debt. The company has a total debt of 4,193 crore as of April 30, 2017.
Consolidation in the sector
GTL Infra had lost a total of 3,987 tenants following the wave of consolidation in the telecoms sector.
It lost 2,230 locations from Tata Teleservices, 1,327 from Reliance Communications and 430 more from Sistema Shyam. The total rental of GTL Infra – the operators it hosts on the mobile towers – stood at 51,424 as of September 30, 2017.
“This number had already represented the loss of all RCom rentals and a substantial portion of TTSL rentals. GTL Infra expects an additional impact of 9,000-11,000 rentals due to the consolidation of Vodafone India, Idea Cellular and Aircel over the next 12-18 months. However, with the estimated addition of 10,000 rentals during this period, we believe this impact could be offset, ”he said in a regulatory filing.
GTL Infra had initially forecast it to reach 56,000 as of March 31, 2018.
“With regard to the ongoing Airtel-Telenor and Idea-Vodafone mergers, there are currently a total of 2,589 unlinked rentals. Despite the expiration of the lockdown, these sites have continued for more than two years on average. years and in addition, the company is in active negotiations with operators for the relocation of certain overlapping leases, ”he said.
“Nevertheless, this would represent the impact of the worst-case scenario of this ongoing consolidation on the basis of existing contractual arrangements,” he added.
The second half of the current fiscal year also saw “significant events” beyond management’s control. For example, TTSL has not transferred its contractual lease obligations to Airtel as part of the merger and has issued exit notices, while RCom is also terminating its wireless business.
GTL Infra also finalized its merger with Chennai Network Infrastructure Ltd, a special purpose vehicle formed to park 17,500 towers and 21,000 tenants acquired from Aircel in 2010. The effective date of the merger was December 22, 2017.
As a result of its SDR, the company had reduced its secured debt to 4,193 crore as of April 13, 2017. Its debt (possibly convertible FCCB) was reduced to 560 crore from 1,442 crore.
After consolidation, the remaining operators will need to expand and upgrade their networks to accommodate the increasing number of subscribers and the continued demand for data services. The company is already on track to add nearly 5,000 rentals in the current fiscal year and plans to add 5,000 more rentals from April 2018 to March 2019.
GTL Infra is also pursuing a refinancing plan that will help reduce its annual debt service by 150 crore.