Idea Cellular posts smaller-than-expected Q2 loss; shares plummet 3

Idea Cellular posts smaller-than-expected Q2 loss; shares plummet 3

Idea Cellular posts smaller-than-expected Q2 loss; shares plummet 3

"The standalone tower business of Idea and Vodafone India are pan India passive telecommunication infrastructure business, comprising combined portfolio of approximately 20,000 towers with combined tenancy ratio of 1.65x as of 30th June 2017", it said in filing with stock exchanges.

Bharti Infratel, which was earlier touted as one of the potential buyers for Idea and Vodafone towers, recently brought on board private equity investors KKR and CPPIB. Reliance Jio, in which Ambani has invested $20 billion, launched its services in September.

Idea will get Rs 4,000 crore for its tower business while Vodafone will get Rs 3,850 crore if the tower deal concludes before the merger of their mobile-phone businesses is completed, the companies said in a statement on Monday. "The receipt of these proceeds prior to completion was anticipated and provided for in the merger agreement and hence would not affect the agreed terms of the Vodafone India and Idea merger, including the amount of debt which Vodafone will contribute to the combined company at completion", it added.

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ATC Telecom Infrastructure is majority owned subsidiary of American Tower Corporation. It will have nearly 400 million customers with 35% customer and 41% revenue market share. Jio's pricing strategy has hurt rivals' profits as they try to match low tariffs and also pushed some carriers to consolidate operations. Reports state that the deal is expected to close in 2018.

Mint had reported in February that Idea Cellular was in talks to sell its tower assets in two separate deals thereby marking its complete exit from the tower business in which ATC had emerged the frontrunner to buy around 11,000 standalone towers from Idea. Kumarmangalam Birla will be the Chairman of merged Vodafone-Idea entity and both the companies will have equal stakes in the merged entity over a period of time. Mint had reported that Idea was also in talks to sell its entire stake in Indus to another buyer with the consent of Bharti Airtel. The transaction is expected to take place during the first half of the calendar year 2018.

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