American Tower may buy Essar unit for $400 million

American Tower Corp, is close to finalising a deal valued at $350-400 million with Essar Telecom Infrastructure. According to reports, the transaction would give the wireless tower company a controlling stake in Essar Telecom.

Barclays Capital is advising Essar on the deal which may be announced in the first week of January, according to an unnamed official, cited by the newspaper. 

The report said, Essar Telecom Infrastructure, Essar Group's telecom tower arm is among the smaller players in the country with more than 4,000 mobile phone towers. The report added that spokesmen for the two companies declined comment on the deal. 

Earlier this year, ATC offered a deal worth $1.5 billion to Aircel which has 12,000 towers. ATC made its first acquisition earlier this year when it bought Xcel Towers which had 1,660 towers.  

With the some of the cheapest call charges in the world, India is an attractive market for tower firms as low prices mean thin operator margins, which put pressure on network capex leading to more tower sharing and leasing to save costs.

American Tower which is expanding operations in India is also eyeing the Chinese market as third-generation services drive demand for sharing of masts, president of Asian operations at ATC, Amit Sharma, had told a news agency last month. 

With its acquisitions of local firms Xcel Telecom and Transcend this year, ATC now owns around 2,500 towers and according to Sharma the company plans to triple that number in the next 18 months.