American Tower Corp. (AMT) is all set to purchase 4,200 mobile phone towers from Essar Telecom Infrastructure, industry sources predicted, for approximately $425 million. Essar Telecom Infrastructure is a small-sized wireless tower operator of India. 

The deal is expected to be announced later this month. The wireless tower sector in India is undergoing a wave of consolidation. Smaller players are looking at mergers or complete sell-out to large global tower operators since these companies lack the wherewithal to take on their larger rivals. 

Although the deal is likely to be signed for $425 million, there will be provision for Essar Telecom Infrastructure to scale up its total number of tower counts in the next 60 days since the company has some order backlog that needs to be completed by next two months. After completion of this backlog, the original deal size may go up by another $25 million to $50 million. The deal is subject to the approval of the Foreign Investment Promotion Board of India. 

India offers some of the cheapest mobile call tariff in the world. These low prices have put pressure on wireless service provider’s margins and their capital expenditure plans for network upgrade. As a result mobile operators in the country are tending towards more towers sharing and leasing to save costs. This makes India a lucrative market for wireless tower operators.
 
American Tower currently operates around 2,300 mobile towers in India of which 2,000 were acquired trough purchase of XCEL Telecom Pvt. Ltd and Transcend Infrastructure in 2009. Previous to these acquisitions, the company had entered a build-to-suit agreement with a Tier1 wireless carrier in India to construct 300 tower sites. 

If the Essar Telecom deal goes through, it will take American Tower’s total tower count in India to more than 6,500. This is a substantial number compared to its U.S. tower count of little over 20,000. The company also controls around 2,800 wireless towers in Mexico and 1,230 wireless towers in Brazil.
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