HomeTECHNOLOGYIBM Partners With Viom Networks

IBM Partners With Viom Networks

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IBM and Quippo-WTTIL have partnered to provide IT infrastructure management services and comprehensive technical support. IBM will manage Quippo-WTTIL’s hardware, mailing and infrastructure management software applications. IBM already has five telecom outsourcing contracts in India, including one with Bharti Airtel. In the coming years, the two companies expect to build 25,000 to 30,000 new towers. Earlier, Quippo-WTTIL was a passive infrastructure arm of Tata Teleservices Limited.

Founded in 1999, Quippo-WTTIL has more than 38,000 telecom towers in India. The company recently purchased the towers of Tata Teleservices Maharashtra and valued each tower at Rs 52 lakh. As a result, the company is expected to make a net profit in the next two quarters. However, the company still needs a strategic investor to finance its growth. Therefore, Quippo-WTTIL is looking to raise $150 million through an IPO.

With the IBM partnership, the company will be able to take advantage of IBM’s IT infrastructure support services, which will help Quippo-WTTIL improve operational efficiency. Through these services, Quippo-WTTIL will control operational costs and achieve maximum operational efficiency. IBM will deploy server and storage support, networking and security services. It will also manage relationships with existing service providers and provide overall management and monitoring functions. A major part of the agreement is that IBM will provide helpdesk services and Lotus Notes management.

In March 2010, Quippo Telecom Infrastructure Limited acquired Tata Teleservices’ tower arm, Wireless TT Info Services. This merger will create the sixth largest mobile phone services firm in India. Tata Teleservices will hold 51% of the new company. The combined entity will have more than 38,000 towers in India and plans to add another 25-30,000 in the next two years. It has the highest tenancy per tower at more than two tenants.


Previously known as Quippo-WTTIL, Viom Networks is the owner of more than 37,000 telecom towers and 80,000 tenants across the country. The company was formed by Tata Teleservices Ltd. and Quippo Telecom in 2005. When it was founded, Quippo Telecom Infrastructure held 46% of the company, while Tata Teleservices accounted for the remainder. When the company was formed, major stakeholders, including the Kanoria family and SREI Group, divided their stake among the other shareholders, while Tata Teleservices Ltd., GIC Singapore and IDFC Private Equity, also participated. Another investor in the company, Oman Investment Fund, was part of a consortium led by Macquarie-SBI Infrastructure Fund, a fund that owns 20 per cent of the firm.

While QTIL is promoted by the Kanorias family, WTTIL was owned by Tata Teleservices. The merger created Viom Networks Limited, which will continue to be run by the Quippo management team. As part of the merger, a new board will be formed, consisting of eminent personalities from the Indian telecom industry. And since Viom is the only telecom infrastructure company, the merger will have a positive impact on the industry and the Indian economy.

The company also announced that it has acquired an 11 percent stake in Viom Networks Limited, a leading telecom infrastructure provider, for Rs1,400 crore. Viom Networks has received ISO 14001 and OHSAS 18001 certification. These two certifications were the first for Viom and its industry and were achieved through the integration of Occupational Health and Safety Management System (OHSAS) initiatives and international standards. In a ceremony to mark the milestone, Paul House, MD of SGS India, presented the newly appointed CEO with certificates.

Tata Teleservices

The combination of Tata Teleservices and Quippo will see a substantial investment in infrastructure as they plan to build and operate telecom towers across the country. They plan to scale up their tower count from the current 25,000 to around 50,000. The combined entity will be able to attract a wide array of business from standalone tower companies, as they are also in talks with new entrants in the telecom industry. Tata Teleservices will own half of the combined entity, and the combined entity will be worth more than $2 billion.

Businesses in India benefit from a range of connectivity services from Tata Teleservices. The Tata Teleservices WTTL offers business-oriented connectivity services for medium and large-sized enterprises. These offerings include email security, cloud communication, and collaboration, as well as a variety of marketing solutions. As a leader in the market, Tata Teleservices has built a strong presence in the Indian ICT sector.

The combined entity will have over 18,000 towers, valued at more than $2 billion. Quippo Telecom Infrastructure Ltd will pay Tata Teleservices an upfront cash payment of Rs 2,400 crore. It will also transfer the management control of 5,000 towers to Tata Teleservices. Quippo plans to use its new holding to expand its presence in the Indian telecom industry. This deal will make the company a much bigger player in the country.

The deal between Tata Teleservices and Quippo will create a new company called Wireless-Tata Teleservices WTTL. In January, Tata Teleservices acquired Quippo Telecom Infrastructure Ltd., which has a 49% stake in WTTL. The new company will also own a stake in Wireless Tata Telecom Infrastructure Ltd., which is another entity. In the coming months, WTTL plans to invest up to 55 billion rupees in building new towers.

Stake sale

The Tatas have been trying to sell off their tower arms for a while, and the stake sale of WTTL may be the right time for them. In January, the company announced that it would sell a 49% stake to Quippo, which owns the tower business of rival Spice Telecommunications. Its stake sale will allow Tata Teleservices to focus on organic growth and ramp up its tower count. The Quippo-WTTL combination intends to invest 5,000 crores in tower building by 2010-12 and ramp up its tower count to 50,000. New entrants are also in the mix, so the acquisition of WTTL will create more value for these companies.

While the cash crunch is the primary cause of the telecom sale season, many analysts believe that the slowdown in the Indian economy has nothing to do with WTTL’s valuation. According to BK Syngal, a senior principal at Dua Consulting and a former VSNL board member, the small telecom players’ business model is failing. He says that the main telecom operators have separated their tower arm into separate companies, and stand-alone players with 3,000 to 5,000 towers cannot compete with those companies.

Aircel bid

The merger between RCom and Aircel makes them eligible to bid for spectrum across the country, including North East and Assam. However, the merger entails a raft of restrictions for Aircel. For one thing, it cannot bid in premium spectrum. Furthermore, Aircel cannot bid for new airwaves in circles where it already operates. Hence, its bid for spectrum is doomed unless it makes a change of heart and decides to bid in the same circles.

The company has submitted bids for the acquisition of Aircel towers. GTL, an infrastructure firm, has outbid other companies. It is expected to use the funds for expansion and possibly a bid for 3G license. As for Aircel’s tower business, the total value is estimated between $1.8 and $2 billion. Regardless of which company wins the bid, the combined company may fetch anywhere between $3.5 billion and $4 billion.



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