News
Indian operators confirm deal with American Tower; transaction could close before telcos complete their merger
Vodafone India and Idea Cellular on Monday announced they have inked a deal to sell their standalone towers businesses to America Tower for a combined 78.5 billion rupees (€1.03 billion), with Idea taking a slightly larger share of the proceeds should the transaction close before they complete their proposed merger.
Under the terms of the agreement, American Tower will receive 9,990 towers from Idea Cellular and 10,235 from Vodafone, and will take on the telcos as customers on completion of the deal.
Idea’s share of the purchase price is INR40 billion, while Vodafone’s is INR38.5 billion.
The deal is linked to the merger Vodafone and Idea announced in March last year, which is due to close next year. Once the telcos have merged, around 6,300 colocated tenancies on the standalone towers businesses will be converted into single tenancies over a period of two years, without the payment of exit penalties, the companies explained.
The towers deal is due to close in the first half of 2018, subject to the receipt of regulatory approvals.
"We expect the addition of these two high-quality portfolios to be highly complementary to our existing assets and to contribute to long-term leasing growth as India’s leading mobile operators accelerate their 4G network deployments," said Jim Taiclet, CEO of American Tower.
The deal will be carried through American Tower’s Indian unit ATC TIPL, which was known as Viom before its acquisition by American Tower two years ago.
American Tower said it expects the telcos’ tower assets to generate around INR21 billion in property revenue and INR8 billion in gross margin in their first full year as part of American Tower.
Like their peers the world over, Idea Cellular and Vodafone are keen to monetise their towers assets now, by selling them off to infrastructure specialists and investors.
The pair also both hold stakes in Indus Towers, alongside mobile market rival Bharti Airtel. The telcos are reportedly working on a complex deal that will see a group of global investment funds become the largest shareholder in the business.
