New Delhi, Nov 13: Idea Cellular and Vodafone India have approved the sale of their respective standalone telecom tower business to ATC Telecom Infrastructure Pvt for a combined value of Rs 7,850 crore. According to stock exchange filing by the company, Idea Cellular will get Rs 4,000 crore at the completion of the deal, while Vodafone will receive Rs 3,850 crore from tower sale deal. The deal is expected to be completed by first half of 2018. Vodafone and Idea are in the process of merging operations to create the largest mobile operator in the country.
Meanwhile, Idea Cellular reported a consolidated net loss of Rs 1,106.80 crore for the quarter ended September-17. The company attributed the loss to seasonally weak quarter, which was marked by high competition, regulatory changes and consolidation in the industry. The telecom operator had reported a loss of Rs 814.90 crore in June quarter. Consolidated revenue for the quarter stood at Rs 7,465.50 crore, compared to Rs 8,166.50 crore in June quarter and Rs 9,300.30 crore in the year-ago quarter. In October this year, shareholders of Idea Cellular had approved the company’s proposed merger of its mobile business with Vodafone India, according to a regulatory filing. More than 99% of Idea shareholders voted in favour of the merger at the shareholders’ meeting held yesterday, according to Idea’s statement.
A possible Vodafone-Idea combine will surpass Bharti Airtel as the largest telecommunication company with a total subscriber base of 39 crore, far ahead of Reliance Jio’s 7.2 crore. Further, the combined entity would have 43% of the revenue market share and 40% of the active subscriber base, research firm CLSA had said. The report also went on to add that the two operators complement each other, with Vodafone having strong presence in urban areas and Idea being an established player in the hinterland.
The slew of consolidation in the telecom space may help to reduce the increasing financial stress in the sector. In an interview, Gopal Vittal, the chief executive officer of Bharti Airtel said recently, “In the next 12-18 months, we’ll probably be left with only three operators plus BSNL from the current eight players, which is a good thing as this industry needs a lot of investment.”