Economy

Idea shares down almost 4% on disappointing Q2 show

Idea shares down almost 4% on disappointing Q2 show

Idea will sell its entire stake in Idea Cellular Infrastructure Services Limited and Vodafone India will sell a business undertaking to ATC TIPL.

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.

The standalone tower businesses of Vodafone and Idea comprise a combined portfolio of almost 20,000 towers. Under deal, the company will add about 20,000 communications sites to its existing Indian portfolio. 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.

Vodafone will net $592m from the deal with Indian partner Idea Cellular receiving $615m.

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The sale of tower businesses by the mobile operators comes after cut-throat pricing unleashed by new entrant Reliance Jio Infocomm, backed by billionaire Mukesh Ambani's Reliance Industries, roiled the industry.

Last year Vodafone made a painful $5bn to the firm's original $20bn investment in India. Other players include Ascend Telecom, Tower Vision and Reliance Infratel Ltd. Meanwhile, Tower Vision has separately attracted private equity interest. Bharti and Vodafone each have a 42% stake in Indus while Idea owns 11.15%.

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 Dollars 23 billion with a 35 percent market share.

NYSE-listed American Tower Corporation (ATC) is looking to buy 20,000 standalone. Upon completion of the sale of tower businesses, Vodafone India will receive $592 million and Idea will receive $615 million.