Idea, Vodafone India to sell tower business to ATC Telecom Infrastructure

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

Ltd for about $1.2 billion.

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. The telcos and the tower company will treat each other as long-term preferred partners, and will work together to speed up the expansion of high-speed mobile networks. The merger is aimed at dominating a market which billionaire Mukesh Ambani's Reliance Jio Infocomm Ltd has disrupted with free voice calls and low data prices.

The deal also comes as Idea seeks to pay down debt as it prepares to merge with Vodafone India to surpass Bharti Airtel the country's largest phone operator by subscribers. It will have nearly 400 million customers with 35% customer and 41% revenue market share.

A man speaks on his mobile phone as he sits in front of a shop displaying the Idea Cellular Ltd's logo on its shutter in Mumbai, India, April 28, 2014.

Idea, the third-biggest Indian network operator by revenue and subscribers, said on Monday it suffered a net loss of 11.07 billion rupees in its second quarter ended September 30, which compared with a net profit of 915 million rupees in the same period previous year but was less than the 11.25 billion-rupee loss expected on average by analysts. The companies noted that in the event that the completion of today's sale precedes the completion of the proposed merger, both expected next year, Vodafone India will receive INR38.5 billion ($592 million).

"After Vodafone India and Idea have completed their merger, ~6,300 co-located tenancies of the two operators on the combined standalone tower businesses will collapse into single tenancies over a period of two years without the payment of exit penalties", according to an official statement read. As part of the deal with ATC, Idea will sell its entire holding in Idea Cellular Infrastructure Services (ICISL), while Vodafone will divest its business undertaking to ATC Infra.

Vodafone too has sold its tower business in India to ATC Telecom for an enterprise value of Rs 3,850 crore.

Vodafone (LON:VOD) has inked a deal to sell its standalone tower business in India, the blue-chip telco has said. Accordingly, private equity funds KKR and Canadian Pension Plan Investment Board (CPPIB) had emerged as the top contenders.

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