India's Idea Cellular posts quarterly loss; to sell tower unit


American Tower Corp has agreed to buy about 20,000 mobile phone masts for 78.5 billion rupees ($1.2 billion) from Idea Cellular and Vodafone India, who are seeking to merge.

If the tower deal goes through prior to their merger, Idea Cellular would get Rs 4,000 crore and Vodafone Rs 3,850 crore. "The parties will work together to further the expansion of high speed mobile networks in India", the statement added.

After Vodafone India and Idea complete their merger, 6,300 company-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.

Vodafone India, the Indian arm of Vodafone Plc today announced its financial results for the first half period of fiscal 2018 and posted revenues of Rs 19,002 crore, a drop of 15.8% over the same period a year ago. The deals both grant the respective operators "preferred partner" status, which will allow them to continue using the sites - as well as ATC's other assets - while enjoying preferential terms. The American company had earlier acquired a controlling stake in Viom Networks.

"We expect the addition of these two high-quality contribute to long-term leasing growth as India's leading mobile operators accelerate their 4G network deployments", said Jim Taiclet, CEO, American Tower Corporation.

The numbers have come in the backdrop of pressure easing out on the industry after Reliance Jio started charging customers in April; it has increased tariffs thrice since then, after offering services for free for nearly six months.

For the quarter ended 30-09-2017, the company has reported a Consolidated sales of Rs 7461.90 Crore, down -8.53 % from last quarter Sales of Rs 8157.40 Crore and down -19.75 % from past year same quarter Sales of Rs 9298.88 Crore Company has reported net profit after tax of Rs -1190.90 Crore in latest quarter. However, it said the company's service revenue Arpu (average revenue per user) took a beating due to stiff price competition and it now stands at Rs146 per user.