Is consolidation among telcos a good or bad thing for tower companies? But for some reason, investors were highly excited about the growth prospects of tower companies till about a year ago. It turns out that all hope of a pickup in growth was a mirage. Gross tenancy additions peaked at 8,843 in the June 2017 quarter, around the time the above statement was written. Tenancy addition fell to 4,398, 1,950, 1,933 and 839 in the following four quarters, respectively. The sanguine view is that infrastructure spends are lumpy in nature, and that the drop in tenancy additions is only a temporary phenomenon. Reliance Jio Infocomm Ltd is increasingly relying on other tower companies and on in-house infrastructure for its recent roll-outs. That leaves Bharti Airtel Ltd, whose network growth plans would need to make a generous contribution to Bharti Infratel, for the impact of exits to be offset. At this stage, growth clearly looks like a challenge. There isn’t much hope of recovery from companies such as Aircel that have filed for bankruptcy. Even with Vodafone Idea Ltd, reports suggest that exit penalties may be adjusted against future revenue commitments. Roughly 25% of the business that was lost may be recovered through exit penalties.

(Live Mint)