The Kumar Mangalam Birla’s Idea Cellular and Vodafone India have solely decided to sell their standalone tower businesses in India to ATC Telecom Infrastructure Pvt. Ltd. for an enterprise value of Rs. 7850 crore. Idea cellular would get a share of Rs. 4000 crore while Vodafone will receive Rs. 3850 crore. Both the companies jointly own 20,000 towers with tenancy ratio of 1.65x as per the report of June 30, 2017.
Vodafone India and Idea Cellular as customers and ATC TIPL as mobile network infrastructure provider have satisfactorily agreed to treat each other as long-term preferred partners.
Idea announces that it will sell its entire stake in its tower unit Idea Cellular Infrastructure Service to ATC TIPL, while Vodafone India will sell a business undertaking that owns towers to ATC TIPL.
After the complete merging of Idea Cellular and Vodafone, 6,300 co-located tenancies are bound to collapse into single tenancies over a period of two years.
As per the reports, Vodafone India and Idea merging process is dated on 20 March, 2017 whereby the parties announced their intention to sell the standalone tower business to strengthen the combined business.
The receipt of these proceeds prior to completion was anticipated and provided for in the merger agreement and hence would not affect the agreed terms of the Vodafone and Idea merger, including the amount of debt which Vodafone will contribute to the combined company at completion, the statement added.
Vodafone and Idea have planned to be India’s largest mobile operators with 400 million subscribers, thus retarding Bharti Airtel to the second position in the world’s second largest market.
Furthermore, Idea cellular reported a net loss of Rs.1236 crore on Monday. It was all a consequence of the free voice calls offered by the Reliance Jio, thus disrupting the Indian telecommunication world.