Idea Cellular Reports Net Loss of Rs 1107 Crore in Q2

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The company's tower business reported a standalone revenue of Rs 758.5 crore for the FY17 with a net worth of Rs 662.3 crore. Shares of Idea were trading 2.78 per cent down to Rs 94.35 a piece on BSE.

Idea and Vodafone India have recently entered into active infrastructure sharing arrangement, to avoid duplication of spends and make best use of capex (capital expenditure), the statement added.

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

Vodafone India and Idea Cellular - which are slated to merge soon - have made a decision to sell their respective tower businesses in India to ATC Telecom Infrastructure for Rs 7,850 crore. "Idea's net debt as on September 30, 2017 was Rs 54,100 crore, including a large component of 'deferred payment obligation" for spectrum acquired in auctions.

Idea and Vodafone Group's India unit are on track to merge operations in a deal valued at $23 billion Vodafone India has also agreed to sell its standalone tower business to ATC Telecom for an enterprise value of 38.50 billion rupees.

"In the event that the completion of the sale of the standalone tower businesses precedes the completion of the proposed merger of Vodafone India and Idea, Vodafone India will receive Rs 3,850 crore ($592 million) and Idea will receive Rs 4,000 crore ($615 million)", the joint statement said.

"Both Vodafone India and Idea as customers, and ATC TIPL as a mobile network infrastructure provider, have agreed to treat each other as long-term preferred partners, subject to existing arrangements". The established telecom operators have seen locked in a fierce tariff war to protect their turf, following the entry of aggressive newcomer Reliance Jio in the market.

"Second quarter earnings were bad and the tower deal valuation is not great", said Naveen Kulkarni, co-head of research at Phillipcapital India Pvt Ltd.in Mumbai on phone.

The company has reported net sales of Rs.15692.6 crores during the 6 months period ended September 30, 2017 as compared to Rs.18981.8 crores during the 6 months period ended September 30, 2016.

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