ATC to buy tower businesses of Voda, Idea for Rs 7850 crore

Jon Howard
November 14, 2017

The tower deal will not affect the merger terms of the two companies.

Also, Vodafone India and Idea Cellular - which are slated to merge soon - have made a decision to sell their respective tower businesses in India to ATC Telecom Infrastructure for Rs 7,850 crore. "The parties will work together to further the expansion of high-speed mobile networks in India", an official statement read.

ATC Telecom is a network of 20,000 towers across India.

"The aggregate cash consideration for the transactions is expected to be Rs 78.5 billion, or approximately $1.2 billion at current exchange rates, subject to customary closing adjustments", said the USA based tower company that had earlier acquired Viom Networks, another Indian tower company. Ltd for about $1.2 billion.

It merged its loss-making Indian mobile business with Idea, India's third-largest wireless operator, at the start of the year.

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Shares of Idea Cellular were trading at Rs 94.90 a piece, down by 2.22% on the BSE in the early trading hours Monday. Idea Cellular Infrastructure Services Ltd, a unit of Idea Cellular, had around 9,900 towers with a tenancy ratio of 1.80 as of 30 September 2017.

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. Its offers of free voice calls and data plans, which continued for months, eroded the revenue and profits of competitors such as Idea and Bharti.

The standalone tower businesses of Vodafone and Idea comprise a combined portfolio of almost 20,000 towers. The merger is expected to be completed in 2018.

The agreement, subject to closing conditions and regulatory approval, is expected to be completed during the first half of 2018, ATC said in a statement on Monday.

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