Brookfield Asset Management will buy American Tower Corp's (ATC) 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 wider use of 5G services.

The acquisition is the biggest of Brookfield's three telecom-related deals in the roughly four years the Canadian company has been present in India, the world's second-largest market by number of subscribers.

ATC, on the other hand, will exit India after nearly 17 years. Its fortunes have floundered due to the struggles of top client Vodafone Idea and it recently wrote down the value of the business by $322 million.

Brookfield, whose so-called anchor client is Reliance Industries' Jio, will be in "a better position to manage the challenge that ATC had with high exposure to Vodafone Idea," said Vivekanand S, an analyst at Ambit Capital Research.

Jio and Vodafone Idea compete with Bharti Airtel in the Indian telecom market where, according to an Ericsson report, the number of 5G subscribers will quadruple by 2027, accounting for 40% of the total base, from 11% in 2023.

Airtel is the anchor client of Indus Towers, the current market leader with roughly 193,000 towers. Brookfield has around 157,000 towers and ATC operates some 77,000 towers.

The presence of Airtel, said Vivekanand, means Brookfield's deal to buy ATC will not threaten Indus Towers.

Indus Towers became India's biggest telecom towers company in late 2020 when it merged with Bharti Infratel, then a unit of Airtel, to form a $14.6-billion giant. Brookfield's latest deal is the largest in the space since then.

Bharti Airtel currently owns about 48% of Indus and Vodafone Idea owns roughly 3%.

Indus's shares rose 5.5% in afternoon trading on Friday, while Bharti Airtel's shares were little changed. ($1 = 83.2150 Indian rupees) (Reporting by Nandan Mandayam, Yagnoseni Das and Rishabh Jaiswal in Bengaluru; Editing by Rashmi Aich and Savio D'Souza)