Idea Cellular today posted a loss of Rs 1,106.80 crore for the second quarter of the current fiscal, saying that the business was hit by pricing pressure and GST introduction in a "challenging" operating environment. 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. Idea would get 40 billion rupees from the deal, while Vodafone will get the remainder, the company said.
Idea will sell its entire stake in Idea Cellular Infrastructure Services Limited and Vodafone India will sell a business undertaking to ATC TIPL. Bharti Infratel, the telecom tower unit of top Indian mobile phone company Bharti Airtel, is also in talks with potential suitors to sell a stake to help reduce the parent's $14 billion debt.
The statement said that after Vodafone India and Idea have completed their merger, around 6,300 co-located tenancies of the two operators on the combined standalone tower businesses will coalesce into single tenancies over a period of two years without the payment of exit penalties.
India's network operators are rushing to consolidate amidst a year-long price war sparked by the entry of new competitor Reliance Jio with a brand new 4G broadband network financed by the country's richest man Mukesh Ambani. Stock of Idea was trading 5.62 per cent down at Rs 91.60 on the BSE in early trade.
Canada's Brookfield, which called off talks to buy a stake in struggling Indian network operator Reliance Communications masts arm, has said it is open to acquiring the business under revised terms, while it looks at other potential opportunities in the India. 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 deal is expected to close 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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