JINGLE BELLS ON DEAL ST

The rest of the world may be about to go on a holiday, but India Inc isn't ready to head for the beaches. With 7 days to go for the end of the year, companies, enthused by the great India story, are still striking deals. Keeping up with the X'mas spirit, the Sensex surged 539 points

Rashmi Pratap & Rohini Singh MUMBAI^| NEW DELHI 

GTL to buy Aircel's towers 
    GTL Infrastructure, a company that leases out towers to cellphone operators, has agreed to buy Aircel's towers for Rs 4,000 crore in an all-cash deal, a valuation lower than similar deals in the past, reflecting waning investor interest in telecom. 
    GTL has outbid rival Tata-Quippo in the negotiations to buy the 17,500 towers of Aircel that will take its total to 33,000 and will give it access to another 20,000 that are being set up, said two people familiar with the development who did not want to be identified. That will make it the second-largest independent telecom infrastructure provider in the country. 
    The enterprise value of the deal may be around Rs 8,500 crore, including a debt of Rs 4,500 crore, one of the persons said. Malaysia's Maxis Communications holds 74% in Aircel. The deal may be funded out of internal accruals of the GTL group, said the person, but did not elaborate. 
    "Along with the towers, GTL will acquire the related broadband infrastructure as well," the person privy to the discussions told ET. 
    "We have not yet concluded the deal," said Aircel CEO Gurdip Singh. "The process is still underway and we are in talks with three parties." He did not disclose the other two. A GTL spokesperson and Quippo Telecom Infrastructure (QTIL) CEO Probal Ghosal declined to comment for the story. 
    Investor interest in India's telecom sector, especially mobile phones, is waning, as the intense competition with the advent of Russia's Sistema making look future profitability thin. Tariff war in the sector has led to analyst downgrades of stocks, which have been the worst performers this year, even as the benchmark stock indices are on course for record gains. Mobile phone companies are leasing out infrastructure than set it up themselves to control costs. STANDING TALL GTL, Aircel ink 45-day exclusivity agreement 
"GOING by past deals, GTL has bagged Aircel towers at a fair valuation," said a sectoral analyst who did not want to be identified. "It's not a stretched deal compared to the prices at which Bharti and Reliance Communications sold their towers. Plus, GTL will have Aircel as anchor tenant." 
    Bharti Infratel and Reliance Infratel, the companies that own signal towers of mobile majors Bharti Airtel and Reliance Communications, in the past had sold stakes in those firms at astronomical valuations when the bull market was raging before the credit crisis. There are hardly any companies that are eager to pay such valuations now. 
    The value per tower for Bharti and Reliance deals were between Rs 100 lakh and Rs 120 lakh, said the analyst, while for GTL, the Aircel purchase works out to an average of Rs 48.5 lakh per tower. When Tatas merged their towers with Quippo Telecom Infrastructure, each tower was valued at Rs 61 lakh. In March, ATC had paid $90,000 (Rs 41 lakh) per tower for Xcel Telecom's 1,700. Both Bharti and Reliance plan IPOs for their tower units. Citibank and Barclays are the bankers advising GTL. Aircel is being advised on the deal by Nomura, Standard Chartered and NM Rothschild. GTL has already signed a 45-day exclusivity agreement for the transaction, implying that Aircel will now not talk to any other party. 
    "The deal is expected to be signed by January," said the person. 
    While the mobile phone service providers try to cut cost and be assetlight due to competition, the entry of many players boosts the opportunities for companies such as GTL which lease out infrastructure. 
    Norway's Telenor, Russia's Sistema and Japan's DoCoMo are the latest entrants into the Indian mobile phone market, which is the second-fastest growing after China. India has more than 500 million mobile phone subscribers, more than four times the total estimated population of Japan. 
    The renting of towers also lessens the strain on service providers as they need not keep spending on capital expenditure. 
    "Low-cost model demands service providers to turn capex into opex and remain light on fixed assets," said Ascentius Consulting principal analyst Alok Shende.