Tower Deal between Idea and ATC Completed for Rs. 4,000 crore

Tower Deal between Idea and ATC Completed for Rs. 4,000 crore

Mumbai: Idea Cellular completed its deal of sale of its standalone 9,900 towers to ATC Telecom Infrastructure Private Limited (ATC) for Rs. 4,000 crore. The sale was done via the Kumar Mangalam Birla-owned telco divesting its entire stake in Idea Cellular Infrastructure Services, a 100% subsidiary of Idea, to ATC.

The two-stage acquisition of 20,000 combined standalone towers of Vodafone India and Idea’s costing Rs. 7,850 crore by ATC – the Boston-based telecom tower company would get a lift with the closure of the deal.

Vodafone’s sale of its standalone tower business to ATC was completed for an enterprise value of Rs 3,850 crore in April.

According to a regulatory filing, post the completion of Vodafone India and Idea merger, the 6,300 co-located tenancies of the two operators on the combined standalone tower portfolio will collapse into single tenancies over a period of two years without the payment of exit penalties.

In the last leg of regulatory approvals, the merger of the second and third largest telecom companies in India is expected shortly.

ATC and both the telecom companies have agreed to treat each other as long-term preferred partners, subject to existing arrangements as a vendor, informed Idea Cellular.

The buyout of Vodafone and Idea’s captive towers will add to the portfolio of ATC towers in India to nearly 80,000 and that too at the time when Indian telecom market is seeing an upsurge in 4G network rollouts. This would take ATC closer to market leader Indus Towers and Bharti Infratel who own 1,23,639 and 91,451 towers respectively.

The Birla-owned company said that the receipt of both these proceeds prior to completion was anticipated and provided for, in the Vodafone India and Idea merger agreement and hence would not affect the agreed terms of the merger, including the amount of debt which Vodafone will contribute to the combined entity at the closing of merger transaction.