Tower sale is Vodafone's latest idea in Indian price war

Vodafone India, Idea Cellular to sell mobile tower business to US firm for Rs 7852 crore

Under the merger, the implied enterprise value for Vodafone India would be Rs. 82,800-crore while for Idea, it would be Rs. 72,200-crore. The launch of services by Reliance Jio in September a year ago has spurred a wave of consolidation in the Indian telecom industry.

Idea Cellular reported a fourth straight quarterly loss on Monday as intense competition in the telecom sector continued to hurt, and said it would sell its tower business to reduce debt.

The deal also comes as Idea seeks to pay down debt as it prepares to merge with Vodafone India to surpass Bharti Airtel Ltd.as the country's largest phone operator by subscribers.

The joint statement by the companies further mentioned that their tower businesses - which are pan-Indian passive telecommunication infrastructure businesses - comprises of about 20,000 towers (combined) with a combined tenancy ratio of 1.65x, as recorded till June 30.

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.

The company - which is headed for a merger with Vodafone India - had reported a net profit of Rs 91.5 crore in the July-September quarter of the last fiscal.

Morgan Stanley was the financial adviser to Vodafone while DSP Merrill Lynch was the financial adviser to Idea Cellular. Ascend is backed by IDFC Alternatives. 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.

NYSE-listed American Tower Corporation (ATC) is looking to buy 20,000 standalone.

Idea and Vodafone are also getting merged with each other, excluding the latter's 42% stake in Indus Towers Ltd, heralding the creation of India's largest telecom company in a $23 billion deal.

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