Idea Cellular, Vodafone India to sell telecom towers to American Tower

Javier Stokes
November 14, 2017

The standalone tower businesses of Vodafone India and Idea Cellular are pan-Indian passive telecom infrastructure businesses, comprising a combined portfolio of approximately 20,000 telecom towers.

The company shares ended the session down by 3.61 per cent at Rs 93.55 on the BSE.

During this low demand period, the sequential quarterly voice minutes grew by 1.7% to 255 billion minutes and mobile data volume (2G+3G+4G) witnessed strong sequential growth of 73.5%.

Both Vodafone India and Idea as customers and ATC TIPL as a mobile network infrastructure provider have agreed to treat each other as long-term preferred partners, subject to existing arrangements. 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.

In Mar'17, Vodafone India and Idea announced a merger to create India's largest mobile operator worth over Rs. 1.5 lakh crore, with 35% market share. "The receipt of these proceeds prior to completion was anticipated and provided for in the merger agreement and hence would not affect the agreed terms of the Vodafone India and Idea merger, including the amount of debt which Vodafone will contribute to the combined company at completion", it added.

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The transactions will help ATC strengthen its foothold in India's telecom tower sector. It will have nearly 400 million customers with 35% customer and 41% revenue market share.

The tower business will be sold at an enterprise value of 40 billion rupees ($613 million) to ATC Telecom Infrastructure Pvt Ltd, a unit of American Tower Corp, Idea Cellular said in a statement. Together, Idea Cellular and Vodafone India have a debt of Rs1.08 trillion. Reports state that the deal is expected to close in 2018.

Indus-the biggest tower company-is a three-way joint venture among Idea, Vodafone and Bharti Airtel, which also controls Bharti Infratel.

The deal, which now awaits various regulatory approvals, is expected to be completed next year around March.

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