Vodafone, Idea to sell standalone tower assets to ATC for $1.2 billion

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

The deal, expected to be completed by the first half of 2018, would give ATC an additional 20,000 towers and would raise its global towers tally to 1,70,000. In a BSE filing, Idea Cellular said it will sell its 100 per cent stake in Idea Cellular Infrastructure Services Ltd (ICISL) to ATC. It was decided that post-merger Vodafone India will own 45.1% of the merged entity, after it transfers about 4.9% to promoters of Idea and/or their affiliates for ₹38.74 billion. 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).

"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". It merged its loss-making Indian mobile business with Idea, India's third-largest wireless operator, at the start of the year. "The parties will work together to further the expansion of high-speed mobile networks in India", the statement added.

The deal follows challenges for the blue-chip telco in India, with the entry of rival Reliance Jio sparking a price war in the country's telecoms market.

The decision comes at a time when tower infra major Bharti Infratel is exploring options to acquire the country's largest telecom infrastructure company Indus Towers by buying out holdings of Idea Cellular and Vodafone. The launch of services by Reliance Jio in September past year has spurred a wave of consolidation in the Indian telecom industry.

Under this merger, Vodafone India will get an implied enterprise value of Rs. 82,800 crores and Idea Rs. 72,200 crores.

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 standalone tower business of Idea and Vodafone India are pan India passive telecommunication infrastructure business, comprising combined portfolio of approximately 20,000 towers with combined tenancy ratio of 1.65x as of 30th June 2017", it said in filing with stock exchanges.

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