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Indus Towers to invest Rs 350 crore on green drive

Indus Towers will spend Rs 350 crore this financial year to convert its diesel-run sites to green energy as the country's largest telecom tower provider braces for a short-term disruption due to consolidation in the Indian industry.

The company, with almost 123,000 towers, is confident of strong growth in the medium to long term, after its two major shareholders and tenants - Vodafone India and Idea CellularBSE -0.61 % - merge over the next year, triggering rationalisation of overlapping towers, said Bimal Dayal, chief executive officer of Indus Towers.

The 4-5 telcos that will remain after consolidation will be much healthier and would need to invest in tapping surging consumer demand for services, signalling demand for companies such as Indus, he said. "The number of locations will more than compensate for loss of tenancies," Dayal said.

The tenancy ratio of Indus - the number of tenants per tower - at almost 2.4, is higher than the industry average of 1.9. Indus is a joint venture of India's top three telcos, with Bharti AirtelBSE -0.22 % and Vodafone India owning 42% each, Idea Cellular 11% stake and Providence owning the remaining stake.

"The Rs 350 crore investment has been an average for us over the last couple of years and we will sustain it going forward as well... our vision is to achieve diesel-free operations within the next four to six years ," said Dayal. Indus declined to specify its energy cost as a percentage of revenue. However, as an indicator, Bharti Infratel's energy cost made up over 34% of revenue.