After months of negotiations finally Brookfield Asset Management will acquire the Indian business of American Tower Corporation for an enterprise value of ₹16,500 crore (around $2 billion)., making it the largest telecom tower operator in India.
The acquisition is being done by Data Infrastructure Trust (DIT), an infrastructure investment trust sponsored by an affiliate of Brookfield Asset Management, an announcement said.
ATC India has a portfolio of around 78,000 sites across India. Brookfield already has a portfolio of roughly 175,000 towers that were acquired in 2020 from Reliance Industrial Investments and Holdings. This acquisition will take its total tower portfolio to 253,000, while Indus Towers falls to second position with 204,212 towers.
ATC India will be included in the DIT, which includes the existing telecommunications assets, making it an InvIT play.
The transaction is expected to close in the second half of 2024. The acquired sites are expected to diversify DIT’s revenues and increase touch points with all mobile network operators in India.
This will be Brookfield’s third acquisition in the Indian telecommunications space. In 2022, it also acquired a portfolio of 5,000 indoor business solution sites and small cell sites, which advanced the rollout of 5G and enables telecom operators to extend their coverage capacity in difficult-to-access and dense areas.
ATC India ran into losses with delays in payments especially from Vodafone Idea on which it was dependent to a significant extent. The Indian operations have been under review for quite some time and in the September quarter the parent company took an impairment charge of $322 million on it. In an earnings call with analysts ATC’s Chief Financial officer Rod Smith had indicated that an outcome to its ‘strategic review’ of the India business would be communicated around the end of 2023.
The current acquisition would expand and enhance Brookfield’s existing telecom portfolio in India, said Arpit Agrawal, Managing Director, Head of Infrastructure, India & Middle East, adding that it would enable it to offer a broader array of solutions for its customers and partners. “Through strategic acquisitions like ATC India, we remain deeply committed to empowering digital connectivity and transforming the telecom infrastructure landscape across the region,” he added.
India is seeing an explosion in consumption of data, and the fast-paced rollout of 5G services by Bharti Airtel and Reliance Jio underpins the demand for telecom infrastructure as well. 5G subscriptions in India are expected to reach the 500 million mark by 2028 with a penetration of about 57 per cent, according to an Ericsson Mobility report. India is among the top 3 countries in the world with the largest 5G installed base.
In India, Brookfield has approximately $25 billion in assets under management across infrastructure, real estate, renewable power and transition, and private equity.