ATC closes ₹4,000 crore deal to acquire 9,900 telecom towers from Idea Cellular
With the completion of this deal with Idea, ATC owns or operates over 78,000 tower sites in India
New Delhi: Idea Cellular Ltd on Thursday said American Tower Corp. (ATC) has completed the acquisition of its 9,900 stand-alone telecom towers for around ₹4,000 crore.
This comes after the company in April completed the acquisition of Vodafone India Ltd’s 10,200 stand-alone towers for around ₹3,850 crore.
With the completion of this deal, ATC owns or operates over 78,000 tower sites in India. State-run telecom operator Bharat Sanchar Nigam Ltd (BSNL) owns 66,000 towers, while Bharti Infratel and Indus Towers combined will have a portfolio of over 160,000 telecom towers.
Vodafone India and Idea Cellular had in November 2017 separately agreed to sell their respective stand-alone tower businesses in India, totalling 20,000 towers, to ATC Telecom Infrastructure Pvt. Ltd, a subsidiary of ATC, for ₹7,850 crore.
The tower sale was announced after Vodafone India and Idea Cellular announced a merger in March 2017. Under the merger plan, the two companies outlined a plan to sell their individual stand-alone tower businesses to strengthen the balance sheet of the combined entity, which would become the largest telecom operator in India. The receipt of the tower sale proceeds does 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. The merger between Idea and Vodafone is expected to be completed soon.
“Post the completion of Vodafone India and Idea merger, 6,300 co-located tenancies of the two operators on the combined stand-alone tower portfolio will collapse into single tenancies over a period of two years without the payment of exit penalties. Both Vodafone India and Idea as customers, and ATC as a vendor, have agreed to treat each other as long-term preferred partners, subject to existing arrangements,” the statement said.
Operators in the competitive telecom sector have been selling or paring stake in their non-core assets. While Vodafone India and Idea Cellular have sold stand-alone towers to ATC, Bharti Infratel and Indus Towers have agreed to merge their businesses.
In order to monetize its telecom tower infrastructure, the government too, in September last year, announced a plan to hive off BSNL’s tower assets into a separate company fully owned by the state-run firm.
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