Saturday, 23 June, 2018

Board of Ideal Cellular approves sale of tower business held by subsidiary

Idea Q2 vs Q1 Idea Q2 vs Q1
Sherri Watson | 13 November, 2017, 10:35

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 worlds second-largest telecom market. ATC will remain a long-term supplier to the merged mobile operator.

Idea and Vodafone have also chose to sell their standalone tower business in India to ATC Telecom Infra for Rs 7,850 crore.

Both Vodafone and Idea had earlier this year announced their plans to merge into a single entity.

Shares of the company declined Rs 2.65, or 2.73%, to trade at Rs 94.40 at the BSE (Monday).

Idea and Vodafone India have recently entered into active infrastructure sharing arrangement, to avoid duplication of spends and make best use of capex (capital expenditure), the statement added. The deal is expected to close in 2018.

Net loss after tax was Rs1,107 crore in the quarter ended 30 September, compared with a profit of Rs91.5 crore a year earlier, Idea Cellular said on Monday.

India, the world's No.2 mobile phone market, has been rattled by the aggressive pricing of Jio, the telecoms arm of billionaire Mukesh Ambani-controlled Reliance Industries. Idea will get Rs 4,000 crore (and Vodafone Rs 3,850 crore) from the tower deal if sale completion precedes telcos' merger.

Vodafone India has also agreed to sell its standalone tower business to ATC Telecom for an enterprise value of 38.50 billion rupees. The transactions are expected to be immediately accretive to AFFO per share, are subject to customary closing conditions and regulatory approval and are expected to close in the first half of 2018.

Idea Cellular posted a consolidated net loss of Rs 1,106.8 crore for the second quarter of the current fiscal.