Vodafone Idea will shut down nearly 88,000 cell sites (tenancies) as part of the company’s network optimization drive, the company’s chief technical officer Vishant Vora told analysts in Mumbai yesterday.
Vodfone Idea had sent out notices to shut down 66,000 towers in the first week of September itself, resulting in savings of Rs 1,800 cr per year. The company is eyeing another 22,000 exits, taking the total to 88,000.
A tenancy refers to a single unit of installation at a tower. For example, a single tower can host 5-10 tenancies, including more than one from a single operator. Many telcos, for example, have separate sets of equipment for 2G and 4G, and therefore have to buy two tenancies on a single tower to mount both.
The number represents about 16% of the nearly 5.6 lakh tenancies that the company has at present.
The 5.6 lakh tenancies are placed on an estimated 2 lakh individual towers or rooftops.
The tenancies are being reduced because, in many locations, the company has two sets of equipment — one that used to belong to Idea Cellular and another that belonged to Vodafone India.
The optimization of the network by shutting down 88,000 tenancies would save Vodafone Idea a whopping Rs 5,000 cr per year, Vora said.
Moreover, he said, the equipment removed from sites will be used as spares, which will in turn reduce the cost of repairs and maintenance.
The move to shut down cell sites could hurt companies like American Tower Co and Bharti Infratel. It was reported last month that Bharti Infratel has received notices from Vodafone Idea to shut down 27,447 towers.
The tower companies have also been losing customers in the form of operators like Tata Telservices, Aircel and Telenor, who exited the market due to fierce competition.