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US$2.5 billion deal between Brookfield and ATC India
Canadian company Brookfield has acquired ATC India for US$2.5 billion. This deal allowed the investment company to become a leader in the telecom sector in India. In 4 years, Brookfield has acquired three companies in the industry, the largest ATC.
It is worth noting that the Indian telecom tower operator has been a loss-maker for some time. Despite this, Brookfield is confident of the company’s success. The growing demand for high-speed data transmission is behind the acquisition decision. In addition, the 5G standard is increasing in India and other countries. Ericsson expects the local 5G market to grow strongly:
- by 2027, the number of subscribers to this communication format will account for 40% of the total;
- in 2023, these users accounted for only 11% of the total.
These trends, in turn, require the deployment of advanced infrastructure. Telecom operators can provide this.
Notably, ATC Corporation of America operated in India for 17 years. However, the company’s situation deteriorated sharply following problems with local mobile operator Vodafone Idea. The difficulties arose after the operator stopped paying for ATC’s services. According to Vodafone Idea, this was due to falling revenues and weak cash flow. The mobile operator was a significant customer of the company. As a result, the value of ATC fell by US$322 million, and the company suffered severe losses.
According to an analyst at Ambit Capital, the telecoms business will be able to overcome its problems more quickly under Brookfield’s management. The investment company has the necessary assets and experience to return the operator to profitability. Brookfield owns 157,000 telecom towers, while ATC has 77,000 towers under its management.
ATC India Business Overview
ATC India is one of the industry leaders in the country. American Tower Corporation indirectly owns the company. The operator has been operating in India since 2007 and provides services to major telecom operators, providing connectivity across the country.
ATC India’s businesses:
- construction of their own sites;
- provision of colocation sites;
- passive infrastructure sharing services for mobile operators;
- provision of internal infrastructure for data transmission and communications;
- development and maintenance of customised communications systems for businesses.
As for the parent company, American Tower, it is one of the leading companies in the global market. It has more than 221 thousand communication sites in its portfolio, and this number is growing regularly.