The joint venture of Idea Cellular and Vodafone India has decided to sell the tower business in India to ATC Telecom Infrastructure for Rs 7,850 crore.
Both the companies have about 20,000 towers in India. By selling the respective tower businesses, Idea Cellular would get Rs 4,000 crore, while Vodafone would get around Rs 3,850 crore, Business Standard reported.
According to the merger proposal, Vodafone India will own 45.1 percent of the merged entity after it transfers about 4.9 percent to promoters of Idea Celluar and/or their affiliates for Rs 3,874 crore.
"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 at June 30, 2017," Idea and Vodafone said in a joint statement.
With this deal, ATC will get additional 20,000 towers in a country, which globally operates almost 1.50 lakh communications sites.
"Both Vodafone India and Idea as customers, and ATC as a mobile network infrastructure provider have agreed to treat each other as long-term preferred partners, subject to existing arrangements. The parties will work together to further the expansion of high-speed mobile networks in India," the statement added.
Idea has reported a consolidated net loss of Rs 1,106.8 crore for the second quarter of the current financial year, according to the exchange filing.
Currently, Vodafone India and Idea Cellular are ranked number two and three, respectively, in India and after the merger, it aims to take on India's largest telecom operator -- Bharti Airtel. And also counter the bruising price war triggered by Mukesh Ambani-owned Reliance Jio Infocomm.
The agreement is expected to be completed during the first half of 2018.