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H A R V A R D OUSINESS S CH O O L

0- 110 -057
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Indus Towers: Collaborating with Competitors on

Infrastructure
l11rf11 s was a ln ck //,a/ carriers abroad, especially i11 the U.S., lllissed.
- India Infoline Report o n Ind ia-Telecom, Q4 2008

ln January 2009, Ak hil Gupta, the chairman of Indus Towers, a telecommunication tower
company in Indi a, wa lked thoughtfuUy toward the boardroom where th e company's board was
about to d iscuss its expansion plans. Bharti Enterprises (of whom Gupta was also the deputy group
CEO and managing d irec tor) had spearheaded the formation of Indus Towers along with Vodafone.
Indus was a joint venture created to build and manage the passive infrastructure of wireless telecom
opera tors by bringi ng together three competitors in India's tough telecom market- Bharti Airtel,
Vodafo ne Essa r, and Idea Cellular -and merging their tower holdings. Indus aimed to provide a
"shared teleco m infras tructure" and scale benefits to telecorn operators around the world. With a
portfolio of approximately 93,000 towers, it was the largest independent tower company in the world.
Indus's journey so far had been difficult-it was not easy to force competitors to collaborate-but the
venture partners had managed to overcome their differences and set a precedent in the telecom
indus try. The challenge now was to expand and achieve Indus's goal of 125,000 towers by 2010 in
ord er to maintain its leadership position. The question in Gupta's mind was how Indus could
reconcile the varying objectives of its stakeholders and realize its vision.

Naviga ting uncharted territory was not new for Bharti. A few years earlier, Bharti had signed the
first major outsourcing network contracts with Ericsson, Nokia, and Siemens, and one of the first "on-
demand " contracts, outsourcing its IT function to IBM. The success of these innovations gave Gupta
confidence that the tower venture would prosper. However, he was aware that Indus was different
because of the ingrained, competitive mind-sets of the operators. They also at times had differing
corporate objectives that could lead to potential differences in the joint venture's shared goals. For
instance, while fast expansion could be critical to one operator, healthy return on capital employed
could be more important to the other. In the face of these potential variances, Indus had to maintain a
neutral perspective and actively manage its tenancy factor. On the one hand, it had an obligation to
accede to a partner's requests for towers; on the other, it had to ensuxe that the tower was built at a
location where it could attract enough tenants to be profitable. Some experts were also concerned that
the expansion plans Indus and its competitors had announced could lead to an oversupply of tower
infrastructure. 1

rrolt'550n R.tnjay Gulati. F. Asls Martinez-Jerez, and V. G. Narayanan, and Research Associate Raclma Tahilyani prep.ired this case Th.!.ru.s to
Rat-arch Coordinator Rachna Chawla for case authori7.ation assistance. HBS cases are developed solely as tht' basis for cl.tss d1scusston. G!sl'S
att not intfllded lo terve as endorsements, sources of primary data, or illustrations of effective or inellechvl' management

Copyright C2010, 2012 Prnidenl and Fellows of Harvard College. To order copies or request pemtission lo reprodu(e 01Al<'nals, caU l-800-S-15-
7615, wrtle Harvard Business School Publishing. Boston. MA 02163, or go to www.hbsp.harvard edu/t'ducalors This pubbcat,on may not bl'
dlcitized. photocopied. OI" otherwwe reproducNI. poslNI. or transoulleJ, without the permission ol I IAC\ arJ BusU\ess 5( hool

. . . . . i i ~ l(Wwe • kl Prof. Debldulla Ku. Panda's SICIDDKPIT4/2025-26 at Xavier Institute of Management (XIMB) from Jun 2025 lo Dec 2025
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As the boa rd mee ting - that lnd u s s future
(' \ j),\IN n n pl,1115 hung in the ba lance.

f\1obil e Telephony in India

In 2008, the Ind ia n te leco mmunications industry was the fastest growing in th e w orld , w ith about
10 nullion wire less s ubsc ribe rs added every month and a compound annual growth rate o f 65% from
200-1 to 2008. T he w ire less s ubscribe r base had grown to about 347 million, comprising abo ut 258
million GSM" s u bscri bers a nd 89 million CDMA b subscribers (see Exhibits la and lb fo r w ireless
subscriber base by op e ra to r in India and number of towers by company). 2 Intense compe titi on had
driven the ave rage mo nthly reve nue per user (ARPU) down to $6.83, well below the $52 for the U.S.
and S-10 fo r developed Euro pe (see Exhibit 2 for key wireless metrics among countries). 3 M o reover,
any inc rementa l subscribe r growth was expected to come from low tele-density in rural areas and
increasing affo rd a bility. One analyst anticipated a wireless subscriber base of 603 million and hence a
tele-density of 50.3% by 2012 (see Exhibit 3 for a projection of the wireless ma rke t in Jndia).4

The top- three private players in the GSM segment in 2009 were Bharti Airtel Ltd ., Vod afo ne Essa r
Ltd., and Aditya Birla Telecom Ltd., which operated under the brand name Idea Cellular (see Exhibit
4 fo r financials of Bharti _Airtel, V~dafone Essar, a~d Idea Cellular). Airtel was India's largest, private,
integrated telecom-serv1ces provider and the third-largest single-country wireless opera tor in the
~''?~Id, with 88.4 rnill~on mob_ile cust~mers.~ In 2007,_ th_e U.K.-based Vodafone Group, which h ad
m1~ally ac~ u1~ed a 10 '.° stake ~n Bharti, acqulfed a rna1onty stake in Hutchison Essar. Co nseq ue ntly,
it dives ted ,ts mteres t m Bha rti. The company, renamed Vodafone Essar Ltd had e ti' - ?? -
. _ -, O p ra o ns 111 __ ot
the 23 circles into whJCh the map of India had been divided for the awarding of · h
. . . . Group, an Indian rnultination Iwire 1ess te. 1e p ony
licenses. Idea, a s ubs1d1ary of the Ad1tya B1rla .
ope ra tio ns .in 20 countn.es, was present m
. 15 circles.
. a corporation w ith

/11/rnstm clure 5/mring

Mobile ope rators in some countries shared infrastructure with competit .
il nc.l upgrad e their exis ting infrastructure. Such infrastructure shari'ng :i ors 111 order to au gm en t
• . .
and capital expe nditure of wireless telecom operators, allowing the rel t
uced the O
.
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_ perat1ng cos ts
' . . • 111 o rna1nta1n ·
\ v,..rc two kinds of mfrastructure shanng, achve and passive Active - f t margrns 1 he re
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pn<.,I\~ 111fr,1,truclu1t• ,h,mng

l h1 rt' " 1.'Il.' ,1g 111 firn nt v.n1Jnccs in th e pass ive rnfrac.;tru c turc mod dc; th 1t mob,h: op rc1tor ae ro
tht gh'l'0 1'u1,u('d In the US, fo r instance, whic h w ,1c; pe rcei ved to be an ,1d v,1m i.:d ma r ket in tow r
mfr ,1,11 udurc n1.111 age m c nt, rt wa s uncommon for mo bile phone o pc rotor,; In s hir t towe rs o n a
to" er-b, - 10 \\ e t b.1c; 1s H o wever, se vera l independent tower operators h,1J c m1.: rgrd, ,ind the to p two
o,, 1wd .3l1'hi of lhc marh.el (see Ex hibit 6 for U1e leading to\\·er compr1111 es 111 th e US) 6 The ave rag
1cn,1ncy fo r U1cse tower companies was 2.7 to 3 operato rs per tower/ J\nwrJCdn Towe r was the
lead111g p layer ,,iLh abo ul 23,13-! lowers as well as a presence in tvle,1co and Br.izrl. In Europe, site
, h,mng was n o l very conrn1on among mobi le opera tors. Howeve r, by the 1.:nd ot the l1r<;t decade of
t he tw e nty -firs t century, seve ral fo rms of direc t coope ration we re developing . 1 h~e included
\'oJ a fo ne and Orange's base-statio n-s ha ring dea l in the U .K. and the m o re gcne r,il i.1:ed agreement
be h\\~e n Vodafone a nd Te lefonica to share in fras tructure across Eu ro pe. /\ typical Eu rope,111 player m
th.:.? to v, e r colocation m a rke t w as a broad casti ng fi rm th a t made its tower infr<1s truc tu re a vaila ble to
nc v,' mobile opera to rs.

In India, the concept of to we r sharing was still e volving. In 2007, ope rators s hared o nly 25 % of
l O\\ ers, and the average te na ncy was 1.2 to 1.5 per towe r. 8 Gupta explained :

The way thi s indus try has evolved over the past 15 years has been such that every body p ut
up Lheir own towers . T he result is that you will find five towers in your v is ibl e area . That's
because of inte nse competition to offer more extensive geographic cove rage th;:in othe r
operators . No w that coverage is no longer a big differentiator, the lime has come ior us to get
over this a nd say that this infrastructure needs to be common .

Additiona lly, saturation of urban markets was driving operators to the rural marke t, \\ here to \, e r
sharing wr1s criti cal. Gupta commented, "You can ' t have one towe r pe r o pe rato r c1n,I h up e to m.1ke
money in rura l areas ." The government's target of providing 500 m..illr o n 1L'le ph on1.. .'> by 10 10 and the
la u nc h o f 3G (third-generation) services, which required denser nch,•ork cov1..•r,1ge, we re e:xpt.--ctcd to
crea te a demand for additional towers .9 Industry estimates predicted that lnd1,1 \\1.1tild have 350,000
t0 Y. CrS by 2010.

A,rtel's Foray 111/0 Pnssil'e Infrnstrucl11rc Sl,nn11g

Airtel ventured into the a~ea of passiw !nfrastructun..' s~1.uing in '.!007. In 2004, Airtel had
lenged the conventional wisdom of the w1rt:'less
. tdecom . mdustry by successfully O u tsourcing .
chal
certain functions that had previously been considered essentJ.11
. to tht:- rnnCl'nt
' ut a tel ,..
c .. om operator
i uch as network development and man.igcnwnt (lo No!..1a, Siemens, .1nd rricsson), IT (t IBM
alJ centers. 10 Through these outsourcing .urang1..•mcnts, Airtel had leveraged the d: d~n~~
knowledg of ,ts v<.>ndors, achieved econonut:'s of S(,11l•, and migr,Hl'<i from a I P am
.-nditur modc>I to a smooth and prC'dictdblc opf•r<1tmg lOSI model Ericsson N I umpy capttal
r- I k . o11,.1a and Sien~
tanc h.aJ provided Aartl'I wit 1 nctwor c.1p,11..1ty - m umts known as crll ns,
,or
1
' d i ngs - m accordc1
wkh Airtel' requar me!nl.5, and were in turn pc11 a L'l' dcpcndang on the cap,,cat mst.t nee
w nv rlt'd th pri ang modd from dollJr for OO'\l>s to Joll,1rs for .1irt;me lied Gupta

4 Z (XIMB1Qm,bi-
-..1DDec2025
 (n11
• (' ,,,ii ior, on lnfrJ~tructur1•
lllll h~ In, Iu,, 1ow,•r,·· Coll ,t IHH,I ' o wtl 1I Ill 111

I hH, l'' ,,, , m,1n,,1'l'tnent of p,1.. . . '-\, hJC h w.1s outsourced w1• I ti ' r 'SI of till'
;s1vc 1nfr,1<;truclurc l1 ,c c.
,, . . . t ,1ccom towers in rur .cd
1wl "l'tl -. man,1l;l•nwnt
funcl1onc;-rcq_ui.rrLi alHf I ' '11 c.kill set. '-ictt111g up c
L:rci .
lndi., w,b l",pcc1ally difficult. II
Ma ny v1 age s LI .d t hw c cle ctn . .
:l no '
I LI 10se that did bc1d an err atic
c1t y, anL
pin , L'r sup ply . l
Op era tor s useLI <l 1cse gen tors as 11owcr bac kups , b I die sel use pos ed an
,1dd1lion.1I cha lll'n ge sinc e era . u
d1cs1"I out lets we re Iurn . · I I11 l iitw n the re we re sec u ri·ty pro ble ms in
tct ill L
cer tain are as. 11 No kia , Sie . l. , ' han dli.ng the se iss .
the refo re out sou rce d the m
me ns, and Eri css on had
no c>..pcr isc 111 ues an d ha LI
to . . f. ·th A. t d r·n
sub con trac tors . D1ssalls 1eu wi th· r1r ran gem ent ir e I re e I ed tI1....,..,
J
. . is<
orig ma l agr eem enl s wit .
h the se com par ues . '
to rela m con lro 1 ove r 1·ts pas siv e inf ras tru ctu re. It 1on r
ne
d
an md epe nde nt tow er com
pan y, Bharti· Inf ra tel Lt d (l fr t I) . ,
· I1 too k ove r Air tel s pas .
infr astr uct ure and aim ed to . n a e . , w Iuc siv e
pro vid e pas siv e infr astr uct
thts set up ind epe nde nt of ure ser vic es to all ope rato rs.
tele com ope rati ons , it dec In ord er to ma ke
tow er com pan y tha t it cou ide d to tran sfe r its pas siv
ld tak e pub lic in a cou ple e ass ets to a sep ara te
pic ked up a sta ke wo rth $1.3 of yea rs. In fact, inte rna tion
5 billion in Inf rate l bet we en al inv est ors wh o
com pan y at bet we en $10 Dec em ber 2007 and Ma rch
billion and $12.5 billion. 200 8 val ued the
pro vid ed a mo re ind epe nde Int rod uct ion of lea din g
nt and neu tral per cep tion fina nci al inv est ors
val ue for Airtel. Gu pta ela bor of the com pan y and also
ate d: unl ock ed sig nif ica nt

Ha vin g app lied out sou rcin

g for acti viti es Like IT and
pas siv e infr astr uct ure was net wo rk ma nag em ent , we
one are a wh ere it fitted the felt tha t
this is in com ple te con tras t best. Because if you loo k at
to wh at we do as a tele com this act ivit y,
ma rke ting . Pas siv e infr astr ope rato r. Tel eco m ope rat ion
uct ure is all abo ut ope rati ona is aU abo ut
dntl run nin g. So this was the l acc ura cy and kee pin g the
mo st imp orta nt activity wh net wo rk up
had to bec om e cus tom ers . lch had to com e out and the
ope rat ors

lnfr ate l's objectives wer e to

upg rad e and ma inta in exi
req ues ts, and inc rea se the stin g site s, set up new site
ten anc y of tow ers in ord er s at ope rat ors '
exp ens es. By focusing on the to rea lize sav ing s in ope rati
se objectives, the firm aim ona l and cap ital
bus ine sse s. ed to enable ope rato rs to foc
us on the ir cor e

Ind us To we rs: Es tab lis hin

g a Jo int Ve ntu re
Sha ring tow er assets was
not a com ple tely new id ea
arr ang e~e nts bet wee n com in the Indian teleco m bus ine
peti~ors had existed alm ost ss, as ad hoc
the ear lier arra nge me nts wer since_ the incep_tion of the ind
e btlateral, tow er-by- tower ust ry . Ho we ver ,
dep rec iati on and ope rati ng sha ring wh erein the ren ting
costs. In early 2006, a cou ple par ty div ide d u
GTL and Qu ipp o app roa of ind epe nde nt tow er com
che d Airtel and Vodafone pan ies suc h a~
req uire me nts to them. Airtel and ask ed the m to out sou
and Vodafone did not perceiv rce their tow er
pas sive infr astr uct ure pro vid e any benefit in buy ing tow
ers, but the pro pos al hel ped er righ ts fro m
com pan y. Asim Ghosh, CE pla nt the idea of forming the
O of Vodafone, recaUed, ir ow n tow er
else? Wh at did he brin g to "W hy sho uld I buy or rent
the table? I could do the sam tow ers from som eon e
vie w of Bharti as well." The e things myself. An d in par
essence of to: er_sha ring wa~ allel that was the
from the sam e assets. Gu pta to crea~e value_ by ext rac ting
elaborated, This will help mo re mil eag e
the re is no need to dup lica te 111 reduc111g cap ital
resources." 12 exp end itur e. We bel iev e
In Dec em ber 2006, Vodafo
ne and Airtel took the firs
rornpilny ThP twn rnmpr1 t steps toward forming thei
nies hr1d a prio r relationship r ow n tow er
Airtel, and as par t of their dise through V~dafone's equ ity
ngagement agreement< the com ow ner shi p in
parues signed a common me
mo ran dum
c Onc e V0<l,,fom• Jcqu irc•d
a conl rollm g slak e m I lulc
rct,unc<l only a ,1 4 % ~1.il..c•, h1~ n Essa r Ltd , ,1 ,old 11s
wh1Ch 11 Jcco unle d for J5 5 6°:, ,tal..e m flh.irli l\1rtl'l
mve stmc nl It d,d Ilus lo a,o, to ,i- promolc•rs and
d a conflKI of 111IPrcst

This Clocumcnl IS authorize

d tor use only ,n Prof Oeba
duna Ku Panda's SIC/DOKP
IT4/2025-26 al Xav,er lnst,t
ule of Management (XIMB)
from Jun 2025 to Dec 2025
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,.. tlwj 1,int \l' nlull ' p,'1l1w1:-

ed on how to
les l w lw n /\ i, le i c1ml Vodt1fonc delibert1l
I hl' 11 1.rn ",,., :-ubjccl lo it:, firs t serio us led the v,ll u<1 lio n lo lx,, bc1se d
, ,1htl' thl' ,,._.;els thal c,,ch conl
ribu lcd lo lhc par tn e rs hip. Vod ,1 fone wc1n the
was kee n Lo apro111l assec;sors . /\ir lcl, on
1, 11 tlw (o nslrn
clion or acqu isi tio n cos l of lowe rs a nd ou t quic kly. Gho sh
o f lowe rs a nd was eage r to roll
1,1hci h,rnd
, "ant cd lo look at the b usi ness va lue Lsee w hy I s ho uld
the tow ers a t the ma rke t valu e a nd I d, d n'
rL• tk•c tcd , " Th0y [/\1rlcl] w a nled to va lue nts. " Gup ta kn ew tha t to mak e the
,,1y 111,ukel valu e for
sleel w hi ch didn 't have th a t man y te na
1 stale ma le a nd facil ita te a q u ick
,1grce mcnt work , it need ed to
be a ttrac tive to all partn e rs. To brea k the
poin t scale tha t
te m tha t va lued towe rs acco rding to a
resolution, Airtel pro posed a simp le sys both co mpa nies
main tain equa l shares in the partn ersh ip,
" ·eighled diffe rent towe r a ttrib utes. To ld be valu ed at an equa l
rs to the new vent ure th a t wou
agreed to contr ibute the num be r of towe wher e Voda fone had a
Ind us's oper ation to the 16 circl es
number of point s. This agre e me nt conf ined herm ore, in 4 o f the
had a prese nce were left to lnfra tel. Furt
presence. The 7 circle s whe re only Airtel retai ned in Infra tel,
16 circles, w here lnfra tel had more towe
rs than Voda fone, the extra towe rs were
t in those circl es,
4
y would n ot incre ase its towe r foo tprin
\\ ith the cave a t that the Bhar ti subs idiar s's and Infra tel's
circl es of Infra tel (see Exhi bit 7 fo r Indu
while Indu s wou ld not com pete in the 7
nrcle s of oper a tions).
rs by type - such
agre ed on, each co mpa ny tallie d its towe
In the poin t syste m Ai rtel and Voda fone a weig h t base d on
a nd heigh t- and each type w as give n
as grou nd-b ased towe rs, roof top towe rs,d r poin ts than
ti ons. Roof top towe rs were awa rded fewe
this classifica ti on a nd ce rtain othe r spec ifica ht, and there fore
rooftop towe rs had a lo wer aver age heig
grou nd-b ased towe rs for two reaso ns. One, reve nue pote ntial
of a towe r, w as muc h lowe r. Two , their
the materia l cost, the chief cos t co mpo ne nt to six tenan ts for
ra lly s uppo rt only three te na nts ve rs us up
was lowe r, as a rooft op towe r co uld gene d on the towe r cou nt and the
ted for each circl e base
grou nd-b ased towe rs. A scor e was co mpu to the score fo r eac h of its
er was calcu lated acco rding
weights assig ned . The total score for a partn
circl es.
circles and the prem ium ass igned to th ose
a ppro ach Idea ,
asse t-val uatio n meth od, they d ecide d to
Once Voda fone and Airte l agre ed to this mino ri ty s ta ke in
rator in India at that time, and offe r it a
the third -largest GSM mob ile telec o m ope pa rtner w h o was
reali zed that we wou ld need one ope rator
the joint ventu re. Gu p ta explaine d , "We r for Indu s beca use it coul d
ld beco me a capt ive custo me
fa r behind us in term s of cove rage that wou t to Idea ; they are the
exist ing towe rs. That 's how w e wen
become a pote ntial tena nt for man y of the ent] in all India , b u t
's CEO , recal led, "We were not [pres
numb er-th ree comp a ny." Sanj eev Aga, Idea Indu s's va luati on
onde d enth usias tical ly." Idea agre ed to
we were grow in g aggressiv ely. We resp of towe (11,200)
rs
e in the com pany base d on the num ber
methodolo gy, whic h calcu lated Idea 's shar lnfra tel each
s work ed out to 16% , with Voda fone and
it brou ght in. Idea 's shar ehol ding in Indu te r shar ehol ding
r 2007, the three partn ers sign ed the mas
owni ng 42% of the com pany . In Dece mbe
ed oper ation s.
agreement, and three mon ths later , Indu s start

h h I I
arec1s w1lho u t multistory strudurl'S TO\\U c,g tsp ,mnc1
•'ms Id h 11d lowen were the beat choice for suburba n or rural
usu.ll y USc.'J 111 arl'as popu l,,teJ by high or nuJn ~ structures
lar ... ... . at tQ 50 or 60 sneten. Rooftop towttra
weiY

Sf 1 Is I .... . ~ for frwta ndlng towers wttre

preat'nl
5

10 Dec 2025
1M111u1e of Management (XIMB ) from Jun 2025
 1 nt Bh rlt d
In Id mt r t ,,. 11
l11p lndu tnd 1\-.o p
rily (ud and rn
ly ( ,, a or co t per to,
nt mt tor kn n y) I en nts d mto
1th Indus, w 1th a built-111 r~,1l11t
1on dau allo win g
t I he r, ntal /1.'(' dC'p1mdcd on
~o c l!nanL'i a "C ,l!r rcn lil th" num lx>r of I nan ls, an n
that decrc;iscd ;ic; c1dd11tonal
lh ir pht ll sop h) "Our m o tena nts occ upi ed the tow er. Gu pld
tt o 1s to look for cxp lJ,n cd
win -wi n situ alto ns, which
\\hen \N \\C ha\C' trie d to do out sou rcin we have tne d lo foJJo,-.
g ·rhe tow e r com pan y mak
mfr a-.t ruct urc Ithro ugh incr eme es money when Jt sha res
ntal rent al fcesJ and ope rato rs
enc rm cosL'-1 wh en that infr sav e mo ney (thr oug h low er ren tals and
astr uctu re 1s sha red with thei
r com pet itor s"
All the JOtnt ven ture par tner s con trib
uted peo ple to Ind us so that
effcch\C!ly. Gup ta exp lain ed, "W it cou ld qui ckl y star t fun ctio
e took emp loy ees whe rev er nm g
partnC'r gav e em ploy ees in diff they (the par tner s] cou ld spa
eren t part s of the cou ntry [Ind re. So eac h
1dc d Wd~ lo muv c ahe ia] . The sele ctio n was all vol
ad like ligh tnin g." lnfr atel con unt ary . The
the area s of ope rati ons and trib uted abo ut 300 peo ple wh o wer e
mai nten anc e, acq uisi tion , and exp erts in
lhe area of ope rati ons and mai site dep loy men t. Idea pro vid
nten anc e. Gho sh com men ted ed peo ple in
diff eren t stru ctur e, we use d on Vod afon e's con trib utio n:
to hav e peo ple dou ble- hatt ing "W e had a
JOb. \\'e did n't give so man y and actuaUy peo ple had mo
peo ple to the join t ven ture bec re tha n one
The man age men t com mit tee aus e they stay ed doi ng thei r
had equ al repr esen tati on of all ow n job s."
Stef an Lan gka mp, had wor ked the part ners . The chie f exe cuti
with Vod afon p c;in,P 200., . Voc ve offi cer,
role, and he was cho sen by the fafonP nomin;itP<i I ;rne k;1m
con sen sus of the thre e ope rato p fnr thP
fina ncia l officer. The chie f ope rs. Vod afon e also nom inat ed
rati ng officer and sup ply cha the chi ef
repr esen ted on the sen ior man in hea d wer e from lnfr alel .
age men t team by the HR hea d ldea \.\as
and the chie f tech nolo gy officer.
Ind us was con ceiv ed and org
aniz ed with cert ain imp orta nt
min d. It was a boa rd-r un com prin cipl es of cor por ate gov ern
pan y, with the CEO repo rtin g anc e in
was give n a con trol ling maj orit to the boa rd. No sing le ope rato r par
y on the boa rd. The sha reho tner
and scen ario s, suc h as exit opti lder agre eme nt coverl?d aU po:.
ons , the righ ts and obligations :.1bd1bes
exit, and othe r sim ilar guid of exis ting sha reho lder s m case
elin es. For instance, if lnfr o( an
sha reho lder s in the 16 circles atel, Vodafone, or Idea cea
in whi ch Ind us ope rate d, as sed to be
buil ding their own tow ers and ope rato rs they wou ld be pro hibi
wou ld be requ ired to rent tow ted from
ers from Indu s inst ead .
By 2009, Ind us was eme rgin g
as the dom inan t com peti tor in
wit h a 37% mar ket sha re the Indi an t0\\Cr marl-ct land
(see Exh ibit lb for Indian :.ca pe
com peti tors wer e Reliance, tower marl-et land:,cape). lnd
which had set up its separc1t u,', chie f
plan nin g to merg<• ii.!. tow er e to\\ er com p.in ), and Tata ,
arm ,-vilh Qui ppo Tele~om . "h1 ch "a,
thre e operator:. wer e obligl..'d As an i_ntegr,11 p.ut of the agrc
to use Indu s e,ch1s1\"l'I}' IM -ement all
pro hibi ted from buil ding thei thctr rcl\\er requirement:, and
r own tower~ in lt> cird.:-~ \\er e
artn ers 111 the futu re, thc r wou Fur~hcrmor.:-, CH'n tf the, ceaS(
ld still b(' bou nd by an l' xclu .."'t.1 to be
~no d. Infra tel was pnm..inl :,1,·c obltg,111on to lndu:, for a
y wur ktn t ,111d grow ing tn thc- cert am
radi us o( nu, nee . In add itio :.even c1rd.:--. th,1t ,, crl' be, ond
111 n, Vml,tfom.• ,ind ldt•,1 h,hl u>ll, lnd u,:,
6CVCO circl<.'5 mdc pcn dl'n 1lx1r,111, eh lnult ~omc IO\\" ('Js
tly of Indu s. AmNic,111 I ln, i'r III th
not hav e a ,;uffic:icnt tow,•r por h;-id ,1bo st.u t~I to oper,1tc m lndr
tfnl w .ind th,,, c 1"' " ' 1101 m.in n but II di.I
lh<'r c Wt:r wm c othe r sma ) 101 ,rrs left for 11 to a,qum.:
ller tower co n,p,Hllt~s 1h,1t IH'CC Fmnlh
lndu or oth r tow<'r com pan tl~, ' 1\llltng to fold thc-u
IO\\ Cr por tfoh l mto
L,;:~c,usc tht') ' h,,d lost the hulk
nan cy r ttos of Ii ,; th,m
of thc1r n1~tonu r b..,,.. rnd h.,d
onP

•
1w I
 I Ill ffi?

lb~• J,i, ,l Stq, s o( the Nnv Vl•nlurc: Tran s ition Iss u es

... 1111 1 I ~p,m nf tht<'t' mrmth,; ft11m 1h1..• d,,I" 11( th,• m,1,tr r hc1n hul I r
111 ,1 11 .., h,,d !~Pill' ll\'l' 111 tlw
,,1 lh,.., ,1\i\i1n•1,1h'd 1111g1,1tion p1•1ind lr•d In 'i<lllH' 1•rnw111t• ,,,11ns due• to th, d1:1II n I of
\l f 1'1 fl l l 1 ,,

' 1,, 1111 w,,

,,,n, tlw 1'1't'J'll', pt t 1ll'ssc..,, Vl'ndor ron t, ,K l<,, ,111d ,,.,.,etc:; of tlw thn•c V<'nlurc p,1rtncrs, C',1ch with
... ihlll'll'1'l .,PUil mg model l lw cn ltrL' l1 ,111 -.1l1on p hac.,c lc1<,lctl for ,,houl c1 yc,ir, ,ind m1gr,1tinn of th
11
,. ,tnw,, rnd m,1inll'n,111cc (O&M) aclivi lics lo lndu«; had an advcr'>e impact on qu,1lity ,111d custum r
,,J"'\,lt l

., Jhc nl'l\\'ork down time increased s ig nifi cantly 111 a few circles. Towers were sometimes
"l'l \ Il l •
dt'" 11 101 rc,,c;onc:; JS simp le as de lays in fuel d e li ve ry. The re we re a lso delays in repairs.

The splillmg of network infras tru cture m a nagem en t into "active" and "passive" categories had
,,Jded comple,ity lo the ope ra tion . Fo r the firs t time, a ll ope ra tors started distinguishing betwc.--en
Jclive and passive netwo rk dow ntime, and it was often difficult to ide n tify who was responsible for
5 ~,eofic
outages. Sanjay Ka poo r, d e puty CEO of Bharti Airtel Ltd ., elabora ted: "Each one [of the
active and passive ne twor k m a na gers] says, ' It's not my fault, why d o n' t yo u check with the other
team?"'

Sometimes, whe n the Ind us tea m was unable to solve the proble ms, the o pe ra tors stepped in and
used their "legacy resources" to help with maintenance. Manoj Kohli, CEO and joint managing
director of Bhar ti Airtel Ltd., ex plained the problem with Indus's approach: "The p ain of the
customer needs to be fe lt by all the partner companies and the tower company as well. Apa rt from
the quality and delivery SLAs [se rvice level agreeme nts], the human-level understanding should be
inculcated."

Indus also had to ad a pt to a redefined network of vendors. Previously, all the ope rators had local
vendors at the ci rcle level tha t we re responsible for work pertaining to site upkee p and m aintenance
of various passive infras tructure asse ts, such as diesel ge nerator sets and battery banks. Indus
rationalized the numbe r and quality of these vendors and awarded national contracts fo r co mmo n
activities across circles.

These growing pains unveiled the softer management aspects that operators had trad itionally
used to solve some proble ms . Ope rators had always adopted a "firefighting m od e" ra ther than a
systematic process to tac kle ne twork disruptions. This took various forms, from the chief e,ec uti ve
officers of some circles getting involved in emergencies to the usage of personal contacts to acquire
certain sites. However, the Indus O&M team consisted prin1arily of people with domain e,perience
in the fields of finance, la w , and ope rations. As Airtel's Kapoor explained, " One big thing which was
missing from the Ind us resources when this new company was getting formulated was the whole
informality piece. Althou g h the ope rating group very clearly knew about this infom1ality, I think the
new company, Ind us, did not take full cognizance of that." Vodafone's Ghosh had another
~erspective: "I thi n k, with any ne w enterprise, you have to build in sufficient slack for non-delivery
in the mitial par t beca use th.ings don't go in a straight line. In this case we did not have sufficient
~lack" Looking back, Indu s did not develop a stellar reputation for customer service, but,
hirtunately, all th e s ta kehold e rs suffered equally . Thus, the joint venture's position of neutrality
rema111r>d intact.

Ovu a sp,rn of six months, Indus evolved a problem-solving approach to tackle the operational
1
U( Autcl'-; C upta expl<1incd, "There were more dialogues with operators and CTOs in every
circl lrymr, lo umlPrstand where we had gone wrong and then fixing it once and for all on a
u Lu na hit> lM., 1!;"Ind us r lc.trly dclinc,,tl'd n·sponsibilities between active and passive network
in
1
~ ll u•a• w<1s ,, focu,; on transp.u,•ncy of performance within their organizations. It
1 , d11d

r 'Cl fu d ,,c-rv1cC'- ll'VL• I dg H•,•m c nts (SLAs) with vendors, such as those responsible for management

7
 lnt1u I nw, r ( ,,11.ihn
r.ahn w,lh ( m

ltH l\l t,, or l \1h l ,1 mt1ol'h11-..:d

d,11lv 11 poi t,; 011 m:lwork 11pt11
t \ h hm t rnd ud,; ot p1.:1 ,.,, ''" "h 1 ",,< m ,ind av 1il,,I il,t 1
; d,ft 1, 11 It .111,• 1,, 1h, 1., yI r
l "" t« m l'' "'• ,'1 ,ln
ot m ,,l th , 111'l111w ~ or ,nd u'i lry Ix 11 hrn id ir ,
llll. ' nn ,ou n\ ot 11·q1 1m dl, y llwC.,l
1\,1 th ,1d 11,p.1ysv 11 If th
cre d it dr pr rn lm g rv ILv,I r di l wi th
1111 thf' 1111111bc
ul"lll ,le d 01ic1,1 \m ti 1 nl m11 111 l cs. 1hr.
:rc wa s ,ii o ,,n
10" c1 '-)'S\t'ms th,1 eff or t to bu ild
hand<.d<. lh ,1 tlw lnd 1 wo uld rcl ,,y tlw
11,; li',11n h,, d 111 llw so urc e and na tur e of th
ted dm nl A11 Ii I s K, l'V cnl or ,m nul,1r,1•. pro b! m to
,poM rcf krl l•d , "1 bt• In f,,cl, tlH• en ti re
lll'V I' lha
w,,y of wo r~ mg Wil
,o u '"l uh i st,11 n111 IX' l l'Vl'n if yo u we re
lo thi nk thr ou gh ,ill
.,bk• lo come up wi th the fc1,el<i,
the \'.n lm : , ,,n tr, h lu, ,1 pe rfe ct so lut ion . We
,I ,,nd inf orm al wa keep 1m pro v1 5in g ,rn
nn,1 c-ontr,,d11,1ll\ \H ' y of wo rk mg so lha l the wo d im pr ov in g
,\Te ab le lo co ntr ol an d rk ing rcl c1lion sh 1ps be co me
\\ 11hm l\\ o nh,nlh< inf lue nc e lhe se pa be tte r
i, the re wa s a sig nif rtn ers to ser ve ou
ica nt im pr ov em en r c u,; tom c rc; be tte
l in the ne tw or k do r."
lm lu , ha tl lo \\'Ork wn l!m f'
tow ard cre ati ng a
ac cu r.,t e d,, t,, ab ou co mm on inf ras tru
t the ir sit es. Sit e ad ctu re pla tfo rm . Op
dre sse s we re ofl en mi ssi era tor s did no t ha
,bl ,\ su bm i:,s ion s ng . Ad dil ion all y, ve
by ea ch op era tor the re we re nu me ro us
co mm on da ta str uc lha t we re fur lhe r su bje cl
tur e, an d ea ch op era to da ta co rre cti on
d,\ ta o-.:er a ye ar an tor su bm itt ed da ta s. Th ere wa s no
d, in Jan ua ry 2008 in a dif fer en t for ma
, cre ate t. In du s cle an ed up
de scr ibi ng the tow d on e da tab ase wi th the
ers an d an oth er da a sta nd ard ize d rec
eJc h ten an t on to an tab ase de scr ibi ng ord str uc tur e
ass et. ll me rge d an the ten an cy of the tow ers .
"S i le Fi nd er" Ind us d up loa de d all the It thu s ma pp ed
als o cre ate d a we b-b da ta on to a cen tra
ase d ord eri ng sy ste l da ta rep os ito r y ca
sh ari ng ex ist ing low m for pla cin g req ue lle d
ers . Sh are ho lde rs an sts for ne w tow ers
lnd us res po nd ed d an aly sts dis lik ed or
lo the ir co nc ern s by the ap pa ren t lac k of
pla cin g a rep res en hu ma n int erf ac e, an
low er op era tin g ce tat ive in ev ery cir d
nte rs for mo nit ori ng cle off ice . Ind us cre
the pa ssi ve inf ras tru ate d
ctu re sit es.
An oth er iss ue tha
t Ind us fac ed wa
<,l ak eh old ers , eac h s fin din g go al co
of wh ich ha d its ow ng rue nc e am on g
qu 1le ch all en gin g n ob jec tiv es an d cu ltu the thr ee dif fer en
an d led to wh at Ide re. Re co nc ilin g the t
ha d alw ay s en joy ed a's Ag a de fin ed as se ap pro ac he s w,15
the fir st- mo ve r ad va "st ro ng arg um en ts be tw ee n fri
rol lou ls, wh ere as for nta ge an d co ns ide red en ds u A1rtel
the oth er pa rtn ers , sp ee d an d rur al e,p
am 0n g pa rtn ers , bu the foc us wa s on lar an s1 on cri tic al for
t the re wa s dis ag ree ge cit ies . Th ere we re
('x pla ine d · "W e ha me nt ab ou t the urg no inh ere nt conf11ds
ve be en fas tes t on en cy of the ob jec tiv
lra ns1 \lo n, be ca us e ou r fee l; we ha ve be en the es A1rtel's Ka po or
yo u thi nk co lle cti ve fir st to rol l ou t. S,1
rol lou l fro m a bu sin ly for all the sta ke ho lde rs, the mc ho \\ du nn g
ess pe rsp ect ive . Th re wa s ii bit ol :,lo \,
e rol lou t im pa cte d d,1\, no n the
Bh art i Ai rte l the mo
A1rtel's ~~ohli vo ice st, rnm p;u ed to oth
d so me oth er co nc er- ,
for oth er: , to ap prL ern s, su ch as his be
'cia te Jn d tha t ali gn lie f lha t Bh art i's dy
me nt of str ate gy co n., m, ,m WJ _, d1 fhc
lio we ve r, Vo da fon uld be ach 1e\ 'ed lhr ult
e's pe rsp ec tiv e on ou l~h tru-,t ,m ,i ,.r n,l or
d1 scm •,·r l'J fai rly ear tow er ex pa ns ion wa s rad ica
ly on aft er the joi nt lly d,f lcr en t Gh 0s h
wh ich ha d to fir~l ve ntu re wa s for n,e c,p l:u nc d, \\e
an d for em o~ l en su d tha t for us thi s\\
re ma xim um uti liz ,,s an ,._,ftiu0nc, \'('h1cl
ati on of its e'1 sti nt; e
·1he pa rtn ers ab u ha as ,eb H

J dif fer ing ap pro ac

Ind us ha J fin ite c.i he s lo cap ita l. Th is
pit al an d the de ma nd was p.u tic ul. lrh clM
to exec:utl"' W hl' n ., pla(L'd on it by the ll,•n~ing lx---c.rn,i.:
Vo da fom • as'ie~Sl'd .,h .ue lw lde rs \\ ,•r...•
c.ip il,1l pro du cti vit y, bre .1t er llu n 1b ,lhaht )
cu m, ntl y gt• ne r,,l it ililik...•d ,1t th,• p,i
ing n•v en uc s to k•n ll.l
pe r(e nla g,• ,if cu rn• fun d c<1 pil,1l ,•, pe nd ilu re l of rcs ou rc" "
nt n•v en ul' "· 1 low ,,m i thu , im esk '<I
rc-vcnut:'i tha t co uld ev er, i\ir ll'I \'IL'\\'l'd L,lpit,,l ,m h d c:crt.11n
he g,•1wr,1tt•d by cu prn du d1 , il\ n, po
ten tia l lul ur,
nd ne t to Lurr, 111 n•v rrl 'nt inv e., lnw nh ;
,·1111e<; l lwn•f,1ri•, it ind e,, •d 11n,•-,t nw
J\irh•l \,' ,I'> m11d1 nw nh to tut urc rc ,cn u~
xp 111 101 Gu pta ,·1,,ho r ...• hl'l\•r,1l 1n 1me,t111g
1 r;-ih'd, "1 lwr,• , ,1 1.h ,,,1,,t~l 111 n...-t,,ork
l u 11 I 111 (O IK ern ,~1 ,thl•U 1 fll-r,•m1.• in nu ml -,l 't
I 111,w mm h ri•,·,•1 111 llliw , ,m m,•.1,uw
I 1ul' ,·m1 l ,111 l'r, idu th<' smce-.s of 1
pu t Ill, md on ., ,r ,01 1 l'ih:111 b,,,,1
.. tl1.1t l''-'ltCllt,11~•·
, ,, ,, 1th the , 11111111,,
h\\ c,1p1t 1I , ou
i;o,·" Ill' l d011 t t,11
•' .,h JUI th op
1D I th.it
I

01 ,IJl\llQGfnN\1 (XI
)I .M l. !> to Doc
 , 1 '" 1 ,11""''' ,111, . ,, ,1111 11111r, ,,,.,, ~ nu
( 1 lnfr.a 1,unur <' II

I~,, ,11,ril11,f, thl "l' •'Pl'll 1 ,1C'hr-. ",,s l I 1111 ,ii IP the <itll cc-c,c; of Jnduc;'., gro\, lh phr \
,'Ii."- Ill
\ h,i,h -.\h dlld h ,u111111,11 tl'l'd llH' l'll'l'''"l'd splut111n " \\J(' ,lrl' prt>ll) ckar t1bout th f.i
,,,ml ,,,11tu1,•, ,\lld \\l' h,I\C ll) [,(I h · \\ h,ll('\CI imc-.tmcn l p.u,1111, tcrs \\(' acrcc on Ill th (
rnp ")

t,,.,arct

Th ..' ,,.u 111~,..., ll' lr,in.,ition ll' .1 mind-~ct of mulu,11 trust i"lnd collabor,l110n \,tul
lll'l'lkd
and
,,,ntinuinl~ to Cl,mpdc hard in lh0 n1.1 rl..c tpl acc /\ l lndu!>, 1\ ir lcl's Gupl.i, Vodafone' s Ghosh.
ere s1multane oush sh<1rchold crs, bot1rd members. and
I.IN., \t~·' pl,,, l'd multiple ro les - th e) "
m u l li pie ro les made consensus building d 1ff 1cult because 1t \\ as
1,, 1,, ._,,cnt,,tl\ cs ot customers . These
'"'t ,11" ,\\ s dc,11 ho\\ lo rcconc1 le the va ri ous s la l..eholdc rs' d ive rgent pe rspectives

Reachin g l\1aturit y: A Compa ny with a Mind of Its Own

The main challenge fo r Indus tra nsce nd ed smoothing current operations or achieving consensus
s had
among the partners fo r ce rtain d ecisions. The success of Bharti's prior outsourci ng agreement
l'<.'1.?11 cemented on the princi ple tha t each function had to be performed
by the organizati on that could
do it best. For Indus to be able to achieve excelle nce in tower mana gement . everybody involved
\\Ould have to swi tch fro m the m e ntality of a partner collaborat ing in a ve nture to that of an
independe nt tower- m a nagem ent firm . This involved ensuring that the d ecisio n processes did not
fa,·or any of the p artne rs individual ly. It also called for a deeper cultural change that w ould lead
Indus managers and e mployees to think as true tower operators.

For Indus, one of the key challenges was that mobile phone operators and towe r ope rators looked
ed with
at to\\ ers from co mple tely different perspectiv es. Mobile phone operators ,, ere co n.::e m
strove to maximize tower ownership . As far as ro llouts were
operationa l performan ce and always
their own destiny and dislik.ed being dependen t o n third
concerned, they lil,.ed being in control of
e tO\H)r
parties such as tow e r companies . Tower operators, on the other hand, endeavore d to imprO\
performan ce. They had to ensure tl1.1t at the
tenancy beca use that was a critical determina nt of their
Additiona l!\•. they requ irt."<f skill.-. to
operating level, they did not favor one customer over the other.
g sl..ills, p.utnershi p sk.111s
manage multi ple customers . Airtel's Kapoor reflected, "More of in.fluencm
are rL>qutred "
the
Indus dev ised various informal mechanism s to bring about the mind-set ch,111ge and inC'Ulc.1te
"Everythi ng can't be taught in a cl,1ssrol,m . So ., lot of 1t come.-.
required skills. Kapoor explained,
ting
through coac hing. interactive sessions. Also from senior leaders wall-.ing the l,1lk and demonstr,1
held alignment and governanc e meetings, as many as h,o
the capabilities " The operating team also
representa tives from all three stakeholde rs. These
to three per week initially, which included
meetings helped to iron out issues, understan d each stakchold er's perspectiv e and its pain points,
Indus
and resolve any contractua l matters. Board meetings were held every month. On a d,1ily basis,
str ove to overcome operators' suspicions and establish impartiali ty and neutrality in all of its
dealmgs Vodafone' s Ghosh described the tower company' s approach:

We overcame it by the leadership capital or the moral capital that Akhil (Gupta] has O\icr
his team and that I have over my team. We also worked very hard with the tower comp.1ny to
mAb sure that they deliver the goods and are seen to be fair. This is a tough opcr,,ting m,ukct
Sometimes you just need time to settle down And we've used our mornl cap1t,1I (our)
laadenhip capital to get the people to give the tower company the time.

. . . . . . ID lndu'1 villon of .,we must share more" also called for a set of rult--s to avo1J
For tnetanc:e, the lharehold en' agreement required all shattholde rs to refer their hm~r
9
 tn1lu I m, , r ( ollal ,,r.11111
wit h C1 1m1 Ill r

t, In ht I(' l n ,b k 11'1<; lml11-

1 . c 11 ,11, d .i d.il,10 ,..,,. for til l l'll llf l
I hr I Lu• 11 , 1,ui t,i w u p.i
1, ,,
l
,
I
l n
1nI l Il
hm lf' - Op l "'' '''"
,i 11, \\ 1, 1\, l I
had 111 1 ht•( k the- In du I\ 111fr 1 lru tur
s\\ l'h ill far I for th
1..,,11ld 1 1111 pu l up ,, 1ww ln\ \1• 1 lo Jll n
t "" ', \,r lhm c..oo mt: tf lhCrl' w,,c; ,Ill lridu
11 rs ,,1 1lw lm ,1111,n t. IO\\('
r w1U1 ,vc1rl
"'IH•t1' th,· npL'r,11or
, 1.,t \nduc; \\( 'lu \d, pl,1111lC'd lo bu ild
,,11 .. 11 u, I,, "'' " "" If ,1
'' low r dt In t
11H' nw ;1e r s01,1,·1. •
,,g ,c~ nw nl (~1S/\) ru
bu ihi mg nc " ltmCr'- rth er dd in ed the co
1 he co mm erc ial c1s mm cru ,1I ,1c;pccls of
pec t~ did no l req uir e bo I as mg ou t an d
had lo ,,ppro, 1' am· ma ,ir d ,1p pro v,d . I low
jor am en dm en t in the 1.: ver, the bo ard
that. "' th.:- ur dc s wh MSA. Th e MSA ha d
en? In du s wa s pr es a no n- co mp ete cla us e
tO\ \\'.' T. In the ~c en t, the sta ke ho lde sti pu l.i tm g
,·en circles wh ere In rs ha d to req ue st tha
du s ha d no pre sen ce , t Ind us bu ild the
m the ll,ur locations the re we re no bin uin
wh ere Inf rat el an d g cla us es Ad dit ion all
ncedC'd location, the n In du s we re bo th pr es en t, if lnf rat cl y,
In du s wo uld no t bu alr ea dy hild a tow er
an ag ree d-o n "sa les " ild an oth er tow er the re. Ins tea m a
co mm iss ion for the d, lnf rat el wo uld pa
mo re specific sit ua tio ad dit ion al tow er' s ren tal inc y In du s
ns , su ch as lhe de ma om e. Th e MSA als o
kilometers) of an ex nd for a tow er wi thi took ca re of
ist ing tow er. ln su ch n a sp ec ifi ed dis tan ce
fulfilling this de ma nd ca ses , the op era tor (se ve n to eig ht
. Mo reo ve r, In du s de pa id In du s an ad dit
cid ed tha t it wo uld no t ion al pr em ium for
ord er, un lik e so me oth bu ild a ne w tow er wi
er tow er co mp an ies tho ut a fir m
ge ne ral ly, all sites we tha t ha d bu ilt tow ers on
re op en to sh ari ng a pro sp ec tiv e ten an t
sites tha t the op era tor wi th all op era tor s, so me ba sis. \i\'hile,
ha d de cla red as su ch sit es classified as str
we re cu sto mi ze d an -c ou ld be blo ck ed ate gic sit es -
d req uir ed mo re str by the an ch or tenan
price lo the tow er co ing en t SLAs. Th us , the y ad t. Str ate gic sites
mp an y, an d the ir ren de d a ce rta in pr em ium
tal s ran ge d as hig h as to the ba se
Rs . 60 ,00 0 (rupees) to
Rs. 70,000.
Th e R oa d A he ad
Th e Ind us bo ard ha
d big ex pa ns ion pla
350,000-strong tow er ns : by 20 10 , it wa nte
ma rk et in Ind ia. It wa d Ind us to ow n 35':o
bo ard ne ed ed to ad dr s also ea ge r to bu ild of th.:> cst un atc d
es s ce rta in issues to an int ern ati on al presen
en su re tha t this vision ce. But the
wa s a success.
Th e bo ard wo nd ere
d wh o wo uld ste er
CE O- St efa n La ng ka the co mp an y tow ard
mp , wh o wa s on ass these goals once the
identify a pe rm an en ign me nt from Vo da cu rre nt Lndu-.
t CEO, an d it wa s fo ne -le ft in Jun.:> 2009 In.
Add1l1ona1\y, sev era clear tha t it ,,vould tu, h.1d to
l oth er key po sit ion have to b,., an extcrn
s ne e d e d I .11 c.rnd1d.1te
complexities of Ind us rep acements comnwn~u ll" "1 th the ,w.
op era tio ns . r, " :- an d
1h e board also wo nd
ere d if Ind us sh ou ld
m lar ge cillP.S. Sh focus on rural L'\.p,1nsi
ou ld the focus be on on l'r 11 11 :-.houl,I look
inc rea sed tenancy? Sin inc rea sing revenue ... thr ou gh to c,- pm d
ce the economic recess incrcw,ed rentl\-. or
op erator s sh ou \J. \nJ ion rnu ld afk ct sub,.ln thr ou gh
u., rely soll!ly on the lx-r gr n" th for the ,ha
W ha t dc..c'1~ic,n-ma~.m m for gro\\ th or llm rch old mg
' roce<,s sh ou ld the l- to ti ..• up "it h e,tern
? 11 bo d comp,rny fol io" ? ~lw :il oper.1tors"
fac; t ,e fJ, p ' f a fu uld the p.1,,' ('f ' ,pa1\S
ar wo
t,.,nd1ndc; So far \hP n l'rl 'l1 1 ,
U'>
011 ., w,•d \\'u uld
h,l\ e ,u1 ,id, ,•r:se 11n 1on be ,lo \, or
rl'lation!>hipL ,1m on g 1 t
p,,d on ln du ,, qu.1h
t,
p.u trw rs h,, d lh
I hel,Hl"'-' i)I inh li,•,•n r,•l,111, ,. } ,m,,.,,
c ng ruc n t o bJCC l,1v1 ~ t • \.'lr l li..._, lu ot
am 11 , pH • irm ,,1 r.•lt1ll1111-..h1p" Ill Ir f i • s, " 'I
d1 1 m nls aro se? \\ h 11 1 un , 1m ,nt
1

0111priSCl I p11·1ll .... rt IvJ tc'C "hll l\ 11 ,e11pl0 I he 01

wa s thn t ' ' 1 ~r .1101s \\l re thl' m nk
51111 l th(• 1t·, 111111 al pc ,111h• did c tu
r n,11 1111\•1, K t "1 th tht j
pd t d hl.'ncc ,ou ld 11,11 Pm llh u ... i.:r
d I\ th
p,1lllllf' ,,, th tlw u-.
1v, 1nri., tru ,lll l\: lhl crs p1 m '
lxn rd \\(lffll'\I th, t
to I po
th ,t I
tlS l um

10
I "' I 111\fl~ l ,,ll.11l 1111 \1111)," 1th ( 111111•t11l111 !o "" 11111,1 \ llllt l1111 • JI

\ 111 nd,1nwnt.,l quv..,li111, "'•'" how ln dl'ft1h' sutu''-.!:> 111 tlw ,11,c;,, 111 ,, nt p, er bell( hrn.1rk , c p o,1lly
'-llhl' l',Hh t'J'l't,llPr p,Hlnel h,1tl d1ll1•1l'111 sl,1nd,11d-, nr
p1•dorn1c1n<e. I low d1cl .t comp,111y co rnp t(
",th tl'-l'II .,nd lww did it '-t't go.,ls? C UI renlly, with the opcr,,tnrs ,,.., m,11or1ty p,1rln C'rS ,,nd thuc; clo
, ,,n., ~c>nwnl th1ough llwi1 J't1.''-Cl1 C1.' nn llw board, th ,1t i'-.suc was ri·l.il1vely Wt'II co v1;rccl . But, a
11 111 1
lndll" 1.•m1.•1 g1.•d ., ... ,, company with 1tc, own identity and with a ro~c;ihll' 11'< ), things could becom
nnid1 mNC complicated.

As the board members reOected on the future, they anticipated c;omc opcr,1tional chullengcc;
t\llhough the IT network, processes, and tower operating centers had been set up as a global
Ng,rnizahOn that could service multiple countries, including lndia, work remained to be done on
completing the IT network, optimizing processes, and enhancing delivery performance in terms of
number of projects per month. Scaling up would also entail sourcing challenges, since the Indian
supplier market was not large enough to meet Indus's requirements.

The board was adamant that these gestational issues be addressed quickly, because any delays
could have a significant impact on lndus's goals. It wondered how strong the company's foundation
was. Would Indus be the tower provider of the future?
 110 lntf11 \ I fJWt I\ ( •Jllithor •11111••
o w11h ( ump, lllor~ 011 lnfr~,tru lurt

I ,h il•11 la \\111 PIC'<.<; ',11 l>c.c • 'b('1 1\,1<.f' by l )1'('1 ,1 lor In Ind ic1

100

80

60
Million!> or Wireless -+-aha,,,
Subscribers
- - - Reliance
40
...._ Vod.irone

._,.._BSNL

--,!'- Tara Tele

20
-e-- 1dea

Time

Sou rte• Adapted from http.//www.traigov.in/ pressreleases_list_year asp, accessed February 2009.

Exhibit lb Number of Towers by Company, December 2008

Com an
Number of Towers
Indus Towers Descri tion
91,715
Bharti lnfratel JV between Airtel, Vodafone , and Idea operational ,n 16 circles
26,289
Reliance lnfratel Subs1d1ary of Airtel operating In 11 circles
40,000
BSNL and MTNL Subsidiary of Reliance operating rn all 23 circles
40,000 State-owned telephone company
Tata and Ou1ppo
A1rce11 18,000 Present in 23 circles
Essar 7,000 Operator-owned towers , present rn 13 circles
GTL 4,500 Part of Essar Group, present in 13 circles
6,300 Present in 15 circles
TOTAL
2,33,804

Soul"CT' Comp.tny l~hnldlc-.

12

1-....... • 8UUlorlled b UM 001y 1n Prof Del/ad IIJ Ku I ndJ'a SrCIOOKPn ,1 :Xl.l5 26 11 I X;J~ _, M..!n.:tgement ()(Ill.• ) tom Jun 2025 IO 0cc 2025
In blu' "'
 11 11 ln1, ., ~1, 11 , 11111 , JJ0.057
ln,tu, 1,1"' ,, \ ,,l1 ,1h•1 ,1l 1111~ \ \ 11h I 11111 p ,• ll1t 11,

l\t obilc Pc nd r,,tion ("!.,) AHPU (US$) Minu te-; of Usage Rate per Voan· f\linu t,· (U~S)

74 3 16 62 97 0 16
Brazil
47 0 10 38 419 0 02
China
132 9 38.57 297 0 11
Finland
129 1 24 .67 101 0 26
Germany
20 .96 465 0 04
Hong Kong 144 0
6.83 449 0 01
27 7
India
63 .33 243 0 24
Ireland 112.2
12.68 154 0 07
Russia 127.0
43.22 190 0 15
UK 123.7
52 .17 842 0.05
us 87 .1

Source Globa l Wireless Matrix 3Q08, Merrill Lynch .

Exhib it 3 Projec tion of Wirel ess Tele- densi ty in India

90%

80%
70%

60%
50%

40%
30%

20%
10%

2019
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

5ourc-c Compa ny esti ma tes.

13

t (XIMB) from Jun 2025 ro Dec 2025

 II ' I' 1,•'"•t,nJ"• ,vith r 11111n 111011 on lnfr.1 lru lur
110 , ln,111~ I 111\1 1 1 ~ ( " ,.

I ,hil•1t 4 '--11m111,11, 1111,11H 1,,1.., 111llh,1111/\1111•1 I Id, Vml,1111111• l11d1.i, .111d ldi'.1 (._ "lliil,lr I Id
(S m1llio11), "()()• 1 •

llh,11ti /\irtl'I I td ." Vod.1fonl' lncli,1' lck,1 Ccllul.u f td .' 1

Service revenue 7,188 3,724 1,988

Other revenue 66 122 5
Revenue 7,254 3,845 1,993
Operating expenses 4,277 2,820 1,436
EBITDA 2,977 1,025 557
Depreciation and amort1zat1on 934 1,068 275
Others -12e
EBIT 2,055 -43 281
EBITDA margin (¾) 41 27 28

Source Compiled by casewnter using data from http://www.a irtel.in, http://www.ideacellular.com,

and hllp//www.vodafone.com, accessed November 2009.

a For USDINR conversion, the Rm reference rate for March 31, 2009, i.e., 1 USO = 50.95, was used,
for GBPINR conversion, the RBI reference rate for March 31. 2009. i.e.. 1 GBP = 72.86. was used . Thf' rf'~ult~
were for the fmanoal year from April 2008 to March 2009.

b As per US GAAP.

c As per IAS34

d As per Indian GAAP

<' "Others" consists of loss on JV, chanty, and other income.

1,

1 (Xlt ) from Jun :20 5 lo 0.."C 2025

Tdoclumenl d I l(u P lld • ICJ()OKf /T4 02
 1,.. 1111' , n III rIA Ill 1111
II

, ll IIIH l'I ' I \l\\ l I

Souru· Compan )' d ocuments

11

NII IDDec
I 10 ~ 111 t1 11 1, IO\\•,~ , ,,11 ,1 11 .,.,, 11 ,r; "'''" ( omp, 11lftr on fnlr.i lru lur

I ,1111,,1 6 I Jt .,d,ni; l 11,, l'I Lnnqi,11111''- 111 U '-,, 20l1H

111" l'I t ·0111r·'" ' N11111l•l'1 of I O\\'l''" 1\1.irkd,

Amcncan Tower 23,134 United States, Mexico, Brazil
Crown Castle 22,461 United States, Australia
Global Tower Partners 9,995 United States
SBA Commun1cat1ons 6,896 United States

Sour.-e Kr1,1cn f\c·d,m.rn, "fly the Number~ Top Tower Comp.inics for th e Second
(lu.Htcr of ~00/\," RCR IV,rc/c<~ Nt"l11s, October 31, 2008.

Exhibit 7 Indus Towers and Bharti ln.fratel's Circles of Operations

Arca of Operation Circle

Exclusively serviced by Indus Towers Andhra Pradesh, Chennai, Delhi, Gujarat, Karnataka ,
Kerala, Kolkata, Maharashtra, Mumbai, Punjab, Tamil
Nadu, West Bengal

Exclusively serviced by Bharti lnfratel Assam, Bihar, Himachal Pradesh, Jammu and Kashmir,
Madhya Pradesh, North East, Orrssa

Tower assets up to March 31,.2008, managed by Haryana, Rajasthan, Uttar Pradesh (East), Ut1ar Pradesh
Bharti lnfratel, fresh rollout from January 4, 2008, (West)
managed by Indus

Source Company documents

16

l10( ed 1or u onty In P,ot CkbOduttll Ku P.inCl.:i I SIC/OOKr>n 4/2025-2tJ ti Xll• r Ill Ulul of~· n {I mon1 {XIMO) from Jun 2025 10 Dec 2025
 110-0',7

t ,,..,, ,,,., I 11w,·1 1111 l11d11..,

l<1111(1op I owcr

-
l 'on"tr urt1o n co~t (l"'s )
0 2,80 0,00 0-3 200 ,000
15,0 00-2 5,00 0
1,800 ,000 -2 200,000
15,00 0-25 000
Mon11,1v onemting cost (Rs )b 12%
12%
Qcp,rc,at1on (% per annu m) 10%
10%
Interest ((lo per annu m)
Pass ed throu gh to tenan t
Energy costs

SNir,1 ' C0111p,111v c:.llm ales.

11 1 USS=- Rs 51 16
eas the remaining
spond ed to the main tenan ce expen se, wher
of the total opera ti ng cost for a site corre
\i ,\l'!'fCl'-tmJlcly 50% s. The mont hly stand ard opera ting cost
to the landl ord, and trans porta tion ex pense
50 included security expen ses, renta l paid
numb er of tenan ts a t the si te.
0i ., tower depen ded on Lhc type of site a nd the

Tena ncy (in Rs. per m onth )

Exhibit 8b Mas ter Serv ice Agre eme nt Rate s for Tow er

2 Tena nts 3 Tena nts 4 Tena nts

Type of Tow er 1 Tena nt
30,0 00-3 2,00 0 28,0 00-3 0 ,000 25,0 00-2 7 ,000
Grou nd-ba sed towe r 35 ,000 -40 ,000
20 ,000- 22,0 00 18,00 0-20 ,000 16,0 00-1 8,000
Rooftop towe r 24 ,000 -28,0 00

SourCL' Comp any docum ents.

17