Idea Cellular and Vodafone Group Plc (ADR) (NASDAQ:VOD) are in talks with the two North American companies, the Brookfield Asset Management Inc (NYSE:BAM) and American Tower Corp (NYSE:AMT), for a deal to sell their telecommunications infrastructure in India as revealed by Bloomberg.
According to the latest news from NASDAQ Stocks, the grand sale of the wireless towers could fetch $15 Billion, according to the people who asked not to be known. Vodafone and Idea last week decided to combine their Indian operations but transact separate sale processes to a single buyer for better proceeds.
India is the world’s second-largest and the fastest growing internet market by consumers. According to Kumar Mangalam, an Indian billionaire, the investment will create the country’s largest wireless network service provider with a $23 billion enterprise price worth.
Bottom of Form
Merging the two companies will place the firm to compete with Reliance Communication which entered the Indian market last year offering free calls and data service. This has pressed the operators to unite.
As Indian mobile operators expand their stakes in the market to provide for the fast-rising demand for high-speed data services, the sale of the towers is expected to increase the business returns and improve profits.
However, the sale price for the cell tower may well be affected by the pending merger of Idea and Vodafone’s Indian operations according to the unknown sources. This will likely impact on their tenancy levels. Reached for further clarification on the same, both representatives for Aditya Birla Group, American Tower, Brookfield, and Vodafone refused to comment.
Idea Cellular plans to reach an agreement on a sale of its tower assets in the quarter ending June of the year. The company is also open to retain a minority stake in its tower unit, according to the unknown source.
While Vodafone owns 10,926 towers directly, each serving an average of about 1.5 customers, Idea Cellular owns about 8,886 sites, each used by about 1.7 tenants on average. This is according to the March Investor presentations.
The deal if it succeeds could represent the largest investment by foreign financial investors in India’s competitive network infrastructure.