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

Ivan Schwartz
November 14, 2017

Shares of Idea Cellular lost 3.6% in Mumbai trading, while the benchmark S&P BSE Sensex closed down 0.84%.

In 2015, ATC agreed to acquire a controlling stake in Viom Networks Ltd for $1.2 billion.

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.

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 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. It will have nearly 400 million customers with 35% customer and 41% revenue market share.

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Vodafone Group PLC (LON:VOD) has agreed to sell its mobile phone towers in India to American Tower Corp. for 78.5bn rupees. It will have revenue of Rs81,600 crore and an operating profit of Rs24,400 crore.

Vodafone will net $592m from the deal with Indian partner Idea Cellular receiving $615m. Reports state that the deal is expected to close in 2018.

"This transaction follows the Vodafone India/Idea merger announcement of March 20, 2017 whereby the parties announced their intention to sell their individual standalone tower businesses to strengthen the balance sheet of the combined business", it said.

Indus-the biggest tower company-is a three-way joint venture among Idea, Vodafone and Bharti Airtel, which also controls Bharti Infratel. Accordingly, private equity funds KKR and Canadian Pension Plan Investment Board (CPPIB) had emerged as the top contenders.

The transfer of shares is subject to regulatory approvals and is expected to be completed during the first half of calendar year 2018.

Other reports by GizPress

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