Unitech signs pact for sharing telecom towers

Unitech Wireless, the telecom arm of realty company Unitech, on Wednesday announced that it will be leasing towers from Wireless-TT Infoservices Ltd (WTTIL), the tower arm of Tata Teleservices Ltd, and Quippo Telecom Infrastructure Ltd (QTIL), across India. The company said that with this agreement, it will be able to roll out services across 22 circles by the second half of 2009, as planned.

The deal gives Unitech Wireless access to 40,000 towers, which makes it the biggest ever infrastructure sharing deal in telecom in the world. As a result of this announcement, Unitech is expecting the first tranche of money amounting to Rs 1,250 crore from Telenor, its partner in the telecom venture, within the first month.

Norwegian telecom operator Telenor, which had announced purchase of 60% stake in it, last month scrapped its 12-billion krone rights issue. The issue had been earlier proposed for raising funds for its $1.6-billion investment in Unitech Wireless. The company will now be raising the money through a combination of cash flow and additional debt.

While scrapping the rights issue, the company had specifically stated that "closing of the Indian transaction is subject to certain conditions being fulfilled. Telenor anticipates that this will take place during the first quarter of 2009. Telenor remains confident that all conditions will be met within the indicated timeframe". Sources had then confirmed that the investment would be subject to Unitech's ability of signing tower-sharing deals.

According to sources, this week, GSM equipment vendors submitted tenders to Unitech Wireless and orders are expected to be placed within a week. Nokia, Ericcson, Huawei and Alcatel Lucent are the contenders.

According to a statement issued by Unitech Wireless, the company will leverage the existing and future towers and the backbone infrastructure of WTTIL. In addition, an agreement for the provision of transmission has been entered into with TTSL. These agreements are a key component for completing Unitech Wireless' transaction with Telenor, expected in the first quarter of 2009.

TTSL recently merged its tower arm with Quippo Telecom. Unitech Wireless' agreement will provide it access to 40,000 sites, based on the rollout plan of the entity.