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

Idea Cellular’s revenue from operations fell about 20% to Rs7,466 crore

Idea Cellular’s revenue from operations fell about 20% to Rs7,466 crore

Around 6,300 are used by both Idea and Vodafone and will convert to single-tenancy agreements after the sale.

Idea shares fell 2.6 percent to 94.50 rupees as of 11:49 a.m in Mumbai, paring their gain this year to about 27 percent.

American Tower Corp. agreed to buy mobile-phone towers from Vodafone Group Plc's Indian business and Idea Cellular Ltd. for 78.5 billion rupees ($1.2 billion).

Idea Cellular Ltd is now trading at Rs 94.2, down by Rs 2.85 or 2.94% from its previous close of Rs 97.05 on the BSE after the company has reported net loss of Rs 1,108 crore against net profit of Rs 91.5 crore. While the total mobile data users on Idea network remained flat at 38.2 million, the broadband (3G+4G) subscribers increased by 3.2 million to 29.6 million in second quarter.

In the event that the completion of the sale of the standalone tower businesses precedes the completion of the proposed merger of the two telecom companies, Vodafone India will receive $592 million, while Idea will get $615 million.

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Vodafone India MD Sunil Sood had earlier said the merger of the two companies was on track for completion in 2018. The merger, expected to be completed in 2018, is awaiting various approvals.

The established telecom operators have seen locked in a fierce tariff war to protect their turf, following the entry of aggressive newcomer Reliance Jio in the market.

The company's tower business reported a standalone revenue of Rs 758.5 crore for the FY17 with a net worth of Rs 662.3 crore.

In addition to the standalone tower business, Idea also owns 16% stake in Indus Tower Ltd, which is a three-way joint venture between Idea Cellular (through its unit Aditya Birla Telecom Ltd), Bharti Infratel Ltd and Vodafone India.

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