Published: Mon, November 13, 2017
Hi-Tech | By Ellis Neal

Idea-Vodafone to sell tower business to ATC for Rs 7850 crore

Idea-Vodafone to sell tower business to ATC for Rs 7850 crore

The combined entity of Vodafone India and Idea Cellular, which are now India's number 2 and 3, respectively, would dislodge Bharti Airtel to counter the bruising price war in the world's second-largest telecom market.

Idea shares fell 2.6 percent to 94.50 rupees as of 11:49 a.m in Mumbai, paring their gain this year to about 27 percent. Vodafone India will receive Rs. 38.5 billion and Idea will get Rs. 40 billion from the transaction.

The company said its while broadband data usage almost doubled, the rate realisation "continued its free fall" during the three months ended September.

The infrastructure sale will help Vodafone to draw a line under its troubled investment in India.

Idea's sequential quarterly voice minutes grew by 1.7 per cent to 255 billion minutes (against decline of 1.9 per cent in Q2FY17) and mobile data volume saw strong sequential growth of 73.5 per cent.

Idea and Vodafone Group's India unit are on track to merge operations in a deal valued at $23 billion, possibly creating the country's biggest telecom player. The merger, expected to be completed in 2018, is awaiting various approvals.

The standalone tower businesses of Vodafone India and Idea are pan-India passive telecommunication infrastructure businesses, comprising a combined portfolio of approximately 20,000 towers with a combined tenancy ratio of 1.65x as at June 30, 2017.

India, the world's No.2 mobile phone market, has been rattled by the aggressive pricing of Jio, the telecoms arm of billionaire Mukesh Ambani-controlled Reliance Industries. In 2014-15, ICIS reported total income of Rs238 crore, according to filings with the Registrar of Companies.

The incumbent operators have blamed competitive pressures triggered by the free and disruptive offers of Jio, for the financial stress in the sector. The company had reported a net profit of Rs 91.5 crore in July-September a year ago.

This is published unedited from the PTI feed.

Like this: