American Tower bulks up in India with $1.2 billion Viom stake buy

American Tower Corp has agreed to buy a 51 per cent controlling stake in Indian mobile mast operator Viom Networks for Rs 7,600 crore or Rs 76 billion to expand in the world's second-biggest telecommunications market by number of users.

American Tower will combine its portfolio of 14,000 communications towers in India with Viom's estate of about 42,200 -- creating the second-biggest Indian mobile mast operator by number of towers.

After the deal, Viom's majority owner Indian mobile phone carrier Tata Teleservices will see its stake diluted from the current 54 per cent, while SREI Infrastructure Finance that owns about 18 per cent of Viom will exit. American Tower may buy or may be required to buy all or part of the outstanding 49 per cent in Viom, it said on Wednesday.

"With a population of nearly 1.3 billion people, rapidly growing smartphone penetration and limited fixed line infrastructure, India's vibrant wireless industry is poised for a sustained period of network investment," American Tower Chief Executive James D. Taiclet, Jr. said in a statement.

Indian mobile phone carriers are expanding their high-speed 3G and 4G broadband networks taking it to hinterlands in a country where two thirds of the population is under 35 and income levels are growing rapidly.

That has led to an increase in demand for mobile phone masts, which carriers typically lease from specialised tower operators such as Viom.

Indus Towers, a joint venture of India's three top mobile phone carriers, is India's biggest telecommunications tower company with more than 100,000 towers. Bharti Infratel Ltd, a unit of top cellular carrier Bharti Airtel and the only publicly traded Indian telecoms tower operator, owns 42 per cent of Indus. Viom generated about Rs 50 billion or Rs 5,000 crore in rental and management revenue and Rs 2,100 crore or 21 billion in gross margin for the three months to June 30, American Tower said.

It had outstanding debt of Rs 5,800 crore or 58 billion as of end-September. Fourth-biggest Indian mobile phone carrier Reliance Communications is also looking sell a stake in its tower unit and sources had told Reuters in July that American Tower was among the potential suitors.

Credit Suisse advised Viom and its shareholders for the deal, while American Tower was advised by Evercore and Kotak Investment Banking. ($1 = 65.1262 rupees) (Reporting by Devidutta Tripathy