Bharti Infratel, the tower unit of Bharti Airtel, reported a drop in net profit for its fiscal Q3 ended 31 December 2017, which it attributed to a decline in co-locations at its telecom sites resulting from continued industry consolidation.

Infratel’s net profit in the quarter fell 6 per cent year-on-year to INR5.85 billion ($91.6 million), while consolidated revenue rose 7 per cent to INR36.55 billion.

Akhil Gupta, chairman of Bharti Infratel, said: “We are all aware that the Indian telecom industry is transforming with unprecedented consolidation. Inevitably and as anticipated, we saw exits of co-locations from such consolidating operators this quarter. While there would be more exits on this account in [the] coming few quarters, we expect the overall long-term impact to be positive due to expected accelerated step-up of nationwide 4G rollouts by remaining operators.”

Infratel holds a 42 per cent stake in Indus Towers, one of the largest wireless infrastructure companies in the world. The remaining shares in Indus are held by Vodafone India (42 per cent), Idea Cellular (about 11 per cent) and Providence Equity Partners (4.85 per cent).

At the end of 2017, Infratel owned and operated 39,363 towers with 92,211 co-locations in 11 service areas, while Indus operated 122,962 towers with 288,727 co-locations in 15 circles.

Including its 42 per cent stake in Indus Towers, combined co-locations dropped by 6,600 from the previous quarter to 213,476 in Infratel’s fiscal Q3, but were up by more than 8,500 from December 2016. Together they added 752 towers year-on-year to end December with a combined 91,007.

Bharti Airtel reduced it stake in Infratel to 53.5 per cent to raise funds to pay down its debt.