DoT clears Idea’s sale of cellular towers to American Tower Company

The Department of Telecommunications (DoT) has given a go-ahead to the sale of Idea Cellular’s standalone telecom towers to a subsidiary of American Tower Corp (ATC).

Idea through its wholly owned subsidiary Idea Cellular Infrastructure Services (ICISL) has a portfolio of 9,900 towers with a tenancy ratio of 1.80x (September 2017). During the first half of FY18, ICISL had revenues of Rs 597 crore and an EBITDA of Rs 194 crore.

Sources said the DoT has cleared the sale of Idea’s towers to ATC TIPL. The deal was awaiting approval on the FDI clearance from the Department of Industrial Policy & Promotion (DIPP), which has come.

ATC will pay Rs 4,000 crore for Idea’s standalone towers.

In November last year, Vodafone India and Idea inked an agreement with the ATC subsidiary — ATC Telecom Infrastructure (ATC TIPL, formerly Viom) — to sell their standalone towers, a little more than 20,000, for an enterprise value of Rs 7,850 crore or roughly $1.2 billion. As part of the deal, Idea was to sell its entire stake in ICISL and Vodafone India was to sell a business undertaking to ATC TIPL. The deal was expected to be closed by January-June 2018.

In April, ATC announced that it has completed acquisition of Vodafone’s around 10,235 telecom towers in India for Rs 3,850 crore.

This brings Idea and Vodafone a step closer to their proposed merger, which now awaits clearance from the DoT. The merger has been cleared by the stock exchanges, Sebi, CCI and the NCLT. The merger will create India’s largest telecom operator with more than 419 million customers, revenues of over Rs 80,000 crore, 35% subscriber market share and 41% revenue market share.

IDEA Cellular Limited