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Voda, Idea to sell tower assets to ATC for Rs 7850 crore

14 November 2017

If the tower deal goes through prior to their merger, Idea Cellular would get Rs 4,000 crore and Vodafone Rs 3,850 crore.

Vodafone India Ltd, India's second-largest telco, on Tuesday said that it has seen decline across all key financial parameters of the company for the April-September period due to continued pressure from new entrant Reliance Jio Infocomm Ltd. The operator said its service revenues were down on the back of 'continued price competition'.

Vodafone Group PLC's India unit reported a 39 per cent fall in operating profit for the first half of this fiscal year, hurt by a bruising price war started by an upstart rival and a new nationwide sales tax. EBITDA put in a strong performance on the base of cost efficiencies, with the margin going to 21.4 percent.

"In India competition remains intense".

Vodafone India and Idea Cellular on Monday said they have agreed to sell the roughly 20,000 towers that they directly own to a local arm of American Tower Corp. for $1.2 billion (Rs 7,850 crore) cash, a move which will help the two merging telcos pare debt while boosting the tower portfolio of the United States company in a market seeing massive 4G rollouts.

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Consolidated revenue for the quarter stood at Rs 7,465.50 crore, compared to Rs 9,300.30 crore posted during the corresponding period in 2016-17.

Data traffic on its mobile network also grew as the company unleashed a host of data benefits under bundled data schemes.

Furthermore, it said the data usage is exploding and usage per subscriber ( 1MB for Q2FY18) is 2.7GB per month. "Data usage growth led by higher smartphone penetration at over 38% of total customer base", the company said.

"The standalone tower businesses of Vodafone India and Idea are pan-Indian passive telecommunication infrastructure businesses, comprising a combined portfolio of approximately 20,000 towers with a combined tenancy ratio of 1.65x as of 30 June, 2017", both the companies said in a joint statement. Upon announcing their merger in March this year, both operators also stated that they would be looking to sell their standalone tower units so as to strengthen the combined entity, which will surpass Bharti Airtel to become the Indian market leader.