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Vodafone draws a line under Indian experiment with $1.2bn towers sale

13 November, 2017, 10:35 | Author: Nadine Todd
  • Idea Cellular, Vodafone to sell tower businesses to ATC Telecom for ...

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.

Shares of Idea were trading 2.78 per cent down to Rs 94.35 a piece on BSE.

As part of the transactions, Vodafone and Idea Cellular would get the service level and process efficiency benefits from American Tower, means these two telecom operators would continue to get usual service from these tower sites.

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

This is part of Vodafone and Idea's planned merger.

"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.

"The standalone tower businesses of Vodafone India and Idea are pan-Indian 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", Idea and Vodafone said in a joint statement. 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 approval of shareholders and creditors for the merger has already been taken following a meeting organised by Idea under NCLT's supervision in October, it noted. The company's consolidated revenue for the quarter came in at Rs 7,460.5 crore, registering 19.7% yoy decline.

Idea, India's No. 3 wireless carrier posted a loss of 11.07 billion rupees ($169.45 million) in the quarter ended September 30, compared with a profit of 915 million rupees a year earlier.

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