Canada’s BCI-backed India deal creates largest telecom towers platform | Asset Owners

British Columbia Investment Management Corporation (BCI), the investment manager for the public sector of the Canadian province of British Columbia, is deepening its bets in digital infrastructure in the Asia Pacific.

The Canadian pension manager’s infrastructure and renewable resources (I&RR) programme recently announced an additional investment in Data Infrastructure Trust (DIT) to support DIT’s $2.2 billion acquisition of American Tower Corporation India, or ATC India. It did not, however, disclose the amount.

“The investment underscores the long-term opportunity we see in India’s telecom sector,” Helly Ajmera, BCI’s director, I&RR, told AsianInvestor.

DIT is an infrastructure investment trust sponsored by Brookfield Asset Management, along with affiliates of investors including BCI and GIC.

Helly Ajmera
BCI

DIT’s acquisition of all of American Tower’s operations in India, consists the buyout of about 76,000 communications sites for an enterprise value of $2.2 billion.

With the acquisition, DIT is positioned to become the largest tower portfolio in India and the largest platform of telecom towers globally, excluding China, under the new Altius brand.

“Under the new consolidated brand, Altius, we look forward to enabling greater service, network coverage and reliability to mobile network users across India,” said Ajmera.

The deal expands the Brookfield-led consortium’s portfolio of telecom sites to 257,000.

“We are confident this acquisition is a unique opportunity to build scale and drive economic value for customers and shareholders alike,” said Ajmera.

Ajmera, who joined BCI in February 2023, is based in Mumbai, the commercial centre of India.

BCI’s I&RR program has a global portfolio with seven active investments in the Asia-Pacific region. The program continues to expand its presence in the region with the addition of this investment in DIT.

About 3.4% of BCI’s $166 billion in net assets under management is invested in the Asia Pacific.

SURGE IN DATA NEEDS

Data is the world’s fastest-growing commodity aligning seamlessly with the broader megatrend of digitalisation and presents a compelling investment opportunity, a spokesperson for Brookfield Asset Management told AsianInvestor.

“This data needs to be stored, processed, and transferred over wireline and wireless networks for routine consumption, driving demand for various assets (data centres, fiber networks and towers), all requiring significant infrastructure investment.

“The average Indian subscriber today consumes about 31 gigabytes (GB) of data per month on their phones, which is already among the highest in the world. In fact, it’s the highest, and it is projected to grow to 75 GB by 2029,” the spokesperson added.

It’s partly why foreign investors believe there is significant growth potential for the sector ahead.

Total telecom towers installed in India exceeded 800,000 at the end of May 2024, from 740,000 at the start of 2023, a Fitch Ratings report in August noted.

“Large market potential, supportive government policies, including 100% foreign direct investment allowance, opportunities in emerging market technologies like 5G and Internet of Things (IoT) present considerable appeal for foreign institutions,” Rachit Mohan, APAC lead for data centre leasing at JLL, told AsianInvestor.

“Government initiatives like BharatNet and efforts to enhance rural connectivity are also boosting tower installations. The projected growth of India’s digital economy to $1 trillion by 2025 further fuels this demand,” said Mumbai-based Mohan.

The BharatNet project, formerly known as the National Optical Fibre Network, is an ongoing central government project to provide broadband connectivity to rural India.

The aim is to facilitate the delivery of e-governance, e-health, e-banking, Internet and other services to rural India.

Telecom towers continue to grow in India boosted by smartphone usage and the 5G roll-out.
Image credit: Shutterstock

5G, SMARTPHONES BOOST

India’s 5G roll-out and ongoing growth in smartphone use are other significant developments influencing demand for telecom towers.

Telecom operators in India have installed close to 400,000 5G base stations since 2023, according to Fitch Ratings.

“Growth will be driven both by co-location and new tower builds, including macro towers, micro towers, and small cells,” added Brookfield AM’s spokesperson.

According to global industry body GSMA, India is on the path to become a significant smartphone market by 2025, with approximately one billion installed devices.

The south Asian nation is expected to have 920 million unique mobile customers by 2025, including 88 million 5G connections, according to a Mordor Intelligence report

5G technology is expected to add $450 billion to the Indian economy between 2023 and 2040, the report said.

SUSTAINABILITY CONCERNS

As with most other sectors, sustainability of telecom assets has also climbed in importance.

Sustainability considerations are significantly impacting the appeal of telco towers due to the telecom sector’s growing carbon footprint.

Rachit Mohan
JLL

The telecom industry in India accounts for 1% of total carbon dioxide emissions, exceeding the global average of 0.7%, according to JLL.

“This has spurred a push for more sustainable practices in tower operations,” said JLL’s Mohan.

“Adopting green energy solutions has become a key priority, with telecom towers implementing diesel-free sites and increasing grid power availability to meet the telecom regulator’s quality requirements.

“The introduction of 5G has further challenged providers to deliver reliable, sustainable energy solutions amidst surging data traffic,” Mohan added.

While these efforts aim to reduce carbon emissions and increase the appeal of eco-friendly towers, the sector still faces challenges in measurement and comprehensive carbon accounting.

“The industry continues to balance innovation with the demands of India’s digital infrastructure,” he said.

 

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