Vodafone draws a line under Indian experiment with $1.2bn towers sale

14 November, 2017, 00:42 | Author: Regina Lloyd
  • Idea Q2 vs Q1

It merged its loss-making Indian mobile business with Idea, India's third-largest wireless operator, at the start of the year.

The transactions will help ATC strengthen its foothold in India's telecom tower sector. Idea Cellular Infrastructure Services Ltd, a unit of Idea Cellular, had around 9,900 towers with a tenancy ratio of 1.80 as of 30 September 2017. Idea's share of the sale to American Tower will be 40 billion rupees, while Vodafone India will get 38.5 billion rupees.

Idea Cellular today posted a loss of Rs 1,106.80 crore for the second quarter of the current fiscal, saying that the business was hit by pricing pressure and GST introduction in a "challenging" operating environment.

Idea will use proceeds from the tower sale to expand 4G coverage as well, Himanshu Kapania, the carrier's managing director, said by phone Monday.

Shares of Idea Cellular today fell almost 4 per cent after the company posted a loss of Rs 1,106.80 crore for the second quarter this fiscal.




"This transaction follows the Vodafone India/Idea merger announcement of March 20, 2017 whereby the parties announced their intention to sell their individual standalone tower businesses to strengthen the balance sheet of the combined business", it said. The deal is expected to close in 2018.

Mint had reported in February that Idea Cellular was in talks to sell its tower assets in two separate deals thereby marking its complete exit from the tower business in which ATC had emerged the frontrunner to buy around 11,000 standalone towers from Idea.

Media reports have said KKR & Co LP, which along with Canada Pension Plan Investment Board, already owns over a 10th of Bharti Infratel, the only publicly-traded mast operator in India, is leading a group of investors to take control of the company.

The deal is subject to regulatory sign-off and is expected to complete in the first half of 2018.

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