Uninor restructures tower pacts to cut costs

KOLKATA: Telenor's mobile phone joint venture in India is rejigging its tower management pactsto cut costs and beef up resources in potentially profitable regions ahead of the auction of 2G airwaves. 

Uninor is expanding GSM coverage to about 225 towns in
zones such as UP-East, Gujarat, Maharashtra, West Bengal, Andhra Pradesh and Bihar.

Uninor, in which Indian real estate firmUnitech is one-third owner, has tower management pacts with Viom Networks, Bharti Infratel, Reliance Infratel, Indus and GTL. Over the next two months, Uninor plans to move its base stations from its nearly 6,000 tower sites in the four states where it has stopped operations to the nine regions where it is strengthening network. "We are in dialogue with the tower operators for reallocation of the tower sites to match our base stations redeployment plan from the scaled-down to the scaled-up circles," a spokesman for Uninor said, adding that the company plans to use most of the freed-up base stations in its nine priority regions.
 

Uninor is expanding GSM coverage to about 225 towns in zones such as UP-East, Gujarat, Maharashtra, West Bengal, Andhra Pradesh and Bihar, after the Supreme Court in February cancelled Uninor and eight other telecom operators' mobile permits in the 2G spectrum allocation case. 

"Our core network infrastructure redeployment plan has been concluded and the actual transfer of tower sites will start this month," a company executive, who did not wish to be named, said. 

Norway-based Telenor holds 67.25 per cent stake in Uninor. The move is part of the parent company's strategy to reduce costs and reallocate resources ahead of the auction of 2G airwaves in the country. 

In 2009, Uninor had inked long-term network management pacts with the tower operators for 13 circles, but following the scale down in operations in Karnataka, Kerala, Tamil Nadu and Orissa seven months after the court ruling, these tower partners will now effectively handle tower management in nine Uninor circles. 

As per the network management pacts, Uninor will have to continue paying the contracted site infrastructure fees to its tower partners in the four states where it has stopped operations. A person with knowledge of the matter said Uninor pays between Rs 30,000 and Rs 40,000 per site, depending on the location. This, however, could not be confirmed with the company. 

Last month, the Supreme Court set January 11, 2013, as the deadline for the 2G airwaves auction and allowed companies whose licences were revoked to continue operations till January 18. 

India is Telenor's biggest growth market in Asia. The Scandinavian telco's India revenue growth in the first two quarters of 2012 was well ahead of that in its other Asian markets. Telenor's second-quarter India revenues in 2012 jumped 48.2 per cent to 1.03 billion Norwegian kroners, or rs 978 crore, from 698 million NOK, or Rs 660 crore, in the corresponding quarter of 2011.