India’s third largest mobile operator Idea Cellular reportedly is looking to sell its tower unit for an estimated $1 billion, after dropping earlier plans to sell a minority stake.
Idea has reached out to America Tower, Bharti Infratel and Brookfield, sources told CNBC-TV18. Idea is likely to retain its stake in Indus Towers, the joint venture with Bharti Airtel and Vodafone India.
The operator did not issue a statement on the possible sale, but it has earlier indicated it wanted to “monetise” its tower assets to bring down debt, the Business Standard reported. Idea Cellular Infrastructure Services has nearly 10,000 towers, with a tenancy ratio of 1.68.
Last month Idea posted a sharp drop in earnings for its fiscal H1 as financing costs more than tripled year-on-year.
Many mobile operators around the world are selling off their tower assets to reduce debt at a time when their margins are being squeezed.
Market leader Airtel said in a stock exchange filing last month that its board approved a move to explore selling a stake in its tower unit Infratel, which is 72 per cent owned by Airtel.
The country’s fourth largest operator Reliance Communications agreed last month to a non-binding pact to sell a 51 per cent stake in its tower assets to Canada’s Brookfield Infrastructure Group for a consideration that includes an upfront cash payment of INR110 billion ($1.7 billion). RCom said it will use the funds “solely to reduce its debts”.
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