$2.5 Billion Climb: Brookfield Acquires ATC India, Reshaping Telecom Infrastructure Landscape

The Canadian alternative asset manager Brookfield Asset Management will buy American Tower Corp’s loss-making Indian operations for $2.5 billion, it said Friday, becoming the country’s largest operator of telecom towers amid booming demand for data and broader use of 5G services. The acquisition is the biggest of Brookfield’s three telecom-related deals in the roughly four years the company has been present in India, the world’s second-largest market by number of subscribers.

The deal underscores the importance of scale in India’s telecom industry, where more prominent players can achieve cost efficiencies and better negotiate with operators. It also reflects the growing trend of asset-heavy companies monetizing certain international assets to rebalance their portfolios and focus on core markets. The company added that the sale of the ATC India portfolio will help fund existing debt.

Brookfield said the acquired sites are expected to diversify its Data Infrastructure Trust’s revenues and increase its touch points with all mobile network operators in India. The acquisition will also boost its presence in tier-2 and tier-3 cities, where the penetration of mobile connectivity is significantly lower than in major metropolitan areas. The company said the deal is subject to customary closing conditions and regulatory approvals.

ATC’s decision to sell its Indian operations demonstrates the difficulty of running a large business in an emerging and fast-growing economy, said Vivekanand S, an analyst at Ambit Capital Research. The tower company’s fortunes have floundered in India as its top client, Vodafone Idea, continues to face operational and financial challenges. Indus Towers, the current Indian market leader, is expected to be stronger than ATC as it is not highly exposed to Vodafone.

In India, where more than a billion people lack access to mobile broadband services, the number of 4G subscribers is projected to quadruple this year and account for 40% of the overall base by 2027, according to Ericsson. The acquisition will put Brookfield in a solid position to exploit this growth.

BAM’s investment in India is the latest step in a long-term strategy to invest in the country. The company first set up a branch office in 2009 and has since invested in a wide variety of real estate, infrastructure, and power projects in the country, including a luxury hotel group, five national highways, and the nation’s only cross-country gas pipeline. Last year, the company listed a dedicated India-focused infrastructure REIT called Brookfield India Infrastructure Trust. The REIT owns an extensive portfolio of communications towers and other infrastructure assets. BAM owns a stake of about 27% in the REIT. It has approximately $25 billion in assets under management across real estate, infrastructure, and power, with an additional $17 billion in private equity. The firm operates these assets through its global infrastructure segments: utilities, transportation, midstream, and data. It is listed on the New York and Toronto stock exchanges. BAM manages these investments through its 27% Brookfield Infrastructure Partners LP unit ownership.

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