NIFT PG 2012 Question Paper with solutions

  The pace of roll-out of cellular towers has declined significantly to just 8,000 a year compared with 14,000 in the previous financial year. According to data available with the Department of Telecom, over 40,000 new towers were added in 2009-10. While there were 3.47 lakh towers on March 2011, this is expected to move up to 3.55 lakh by the end of the current year, a growth of only 2.3 per cent. In comparison the year-on-year growth rate in 2008 was over 60 per cent. The slowdown is happening across all the tower companies. Bharti Infratel, for instance, has added only 1,225 new towers between September 2010 and September 2011. Indus Towers, which is the joint venture between Airtel, Vodafone and Idea Cellular, rolled out 2,560 towers during the same period. The decline in roll-out has been due to multiple reasons but largely due to failure of the new 2G operators to expand infrastructure and slow uptake of 3G services. Faced with declining profits, the mobile operators have also cut down investments by 50 per cent which, in turn, has hit tower expansion plans. “We were expecting to together add about 50,000 new towers this year but the entire industry has been caught in a crisis which has hit all the tower companies,” said a Mumbai-based tower firm. According to a report from PwC, tenancy ratio of towers are also low although there are 13 to 14 licensed players in each circle. Only Viom Networks currently has a tenancy ratio (number of operators per tower on average) of more than two. Indus Towers, American Towers, Bharti Infratel, Reliance Infratel and GTL have tenancy ratios of 1.89, 1.8, 1.79, 1.74 and 1.4 respectively. “Considering the massive need for towers for rural and 3G expansion, this represents an almost halting of the network roll out. Telecom infrastructure company revenues have declined significantly in the past year, indicating dampening of demand for network rollouts from operators,” the PwC report said. The tower companies’ woes are compounded by a proposed move by the Government to bring them under a licensing regime.