Vodafone India and Idea Cellular have agreed to sell their respective standalone tower businesses in India to ATC Telecom Infrastructure Ltd (American Tower) for Rs 7,850 crore. In a BSE filing, Idea Cellular said it will sell its 100 per cent stake in Idea Cellular Infrastructure Services Ltd (ICISL) to ATC. India’s second largest telecom operator Vodafone India will sell its business undertaking to ATC Infra.
“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.
The deal is expected to be completed by the first half of 2018. The tower deal will not affect the merger terms of the two companies. “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 India and Idea merger, including the amount of debt which Vodafone will contribute to the combined company at completion,” it added.
The sale of tower business is subject to regulatory and other approvals. Earlier this year, Vodafone India and Idea had agreed to merge their operations to create the country’s largest telecom operator worth of more than $23 billion with a 35 per cent market share.
Vodafone India MD Sunil Sood had earlier said the merger of the two companies was on track for completion in 2018.
The combined entity of Vodafone India and Idea Cellular, which are currently 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.