American Tower’s CFO said the company was in the final stage of negotiations to sell a majority stake in its tower unit in India
American Tower is confident of finalizing the sale of its towers business in India soon, the company’s CFO, Rod Smith, said in a presentation with investors.
During the recent Goldman Sachs 2023 Communacopia + Technology Conference, Smith said he’s confident that the business will soon find a buyer for a majority stake.
“It’s really pretty simple. I mean we are looking to sell a majority stake of that business, that could be anything north of 50%. It could go up to 100%. We’re in sort of the late stages of the process. So we’ve been at it for a little while, and we feel confident in terms of where we’re headed for that. And the outcome and the goal is by selling a majority stake, we’re looking to reduce our exposure to that market. That’s clearly one of the outcomes that we are trying to drive. Selling a majority stake also would mean that we have the numbers. And we would be reducing the overall exposure,” Smith said.
In June, Indian newspaper The Economic Times reported that U.S. private equity firm I Squared Capital had emerged the frontrunner to buy a controlling stake in American Tower’s Indian unit, after the latter’s negotiations with Brookfield remained inconclusive.
According to that previous report, I Squared Capital was evaluating the acquisition of a 90% stake in ATC’s India unit, ATC Telecom Infrastructure.
“We’ve learned a lot in India. Some of the things that we’ve learned is that the outcomes that we expected didn’t materialize. And there are reasons for that,” Smith said.
“A couple of simple things. One is we saw rapid consolidation in the market. And we knew there would be consolidation that happened a little quicker than we had anticipated that ended up creating a churn on our numbers, and it turned our growth rates negative,” the executive added.
Smith also noted that the way some of the competition has rolled out with RGO (Renewable Generation Obligation) building a 4G network largely by building their own assets, was not what American Tower expected when it initially entered the Indian in 2007.
American Tower’s tower unit in India operated over 76,000 towers as of the end of 2022. ATC Telecom Infrastructure is currently the third biggest tower infrastructure services provider in the country, behind Indus Towers and Brookfield-owned Summit Digitel.
American Tower ended the second quarter of 2023 with a portfolio of approximately 226,000 communications sites globally.
