Board of Ideal Cellular approves sale of tower business held by subsidiary

Idea Cellular’s revenue from operations fell about 20% to Rs7,466 crore

Idea Cellular’s revenue from operations fell about 20% to Rs7,466 crore

Idea shares fell 2.6 percent to 94.50 rupees as of 11:49 a.m in Mumbai, paring their gain this year to about 27 percent. The voice realisation rate fell 9.9 per cent to 22 paise per minute from 24.4 paise in Q1FY18.

"Both Vodafone India and Idea as customers, and American Tower Corp as a mobile network infrastructure provider, have agreed to treat each other as long-term preferred partners, subject to existing arrangements", Vodafone India and Idea Cellular said in a joint statement. While the total mobile data users on Idea network remained flat at 38.2 million, the broadband (3G+4G) subscribers increased by 3.2 million to 29.6 million in second quarter.

Idea said that the broadband data usage (3G+4G) has almost doubled to 413 billion MB in the second quarter from 228.8 billion MB in the first quarter.

As announced in BSE filing on Monday, the companies will sell off the pan-Indian telecom tower business comprising 20,000 towers with a combined tenancy ratio of 1.65x as at 30 June 2017.

"After Vodafone India and Idea have completed their merger, ~6,300 co-located tenancies of the two operators on the combined standalone tower businesses will collapse into single tenancies over a period of two years without the payment of exit penalties", according to an official statement read. And also counter the bruising price war triggered by Mukesh Ambani-owned Reliance Jio Infocomm. The deal is expected to close in 2018.

The incumbent operators have blamed competitive pressures triggered by the free and disruptive offers of Jio, for the financial stress in the sector.

Idea on Monday reported a consolidated net loss of Rs 1,106.8 crore for the second quarter of the current fiscal.

This is published unedited from the PTI feed.

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