In a move that will create a giant in India’s telecom tower industry, Bharti Infratel Ltd on Monday said that it aims to buy the stake it doesn’t own in its Indus Towers Ltd unit from Vodafone India Ltd, Idea Cellular Ltd and a private equity firm.
The company said that its board has decided to “explore and evaluate acquisition of stake in one or more tranches in Indus Towers Ltd with the aim of making it a subsidiary or wholly owned subsidiary of Bharti Infratel Ltd”.
Indus Towers is a joint venture between Vodafone India, Bharti Infratel and Idea Cellular. Vodafone and Bharti Infratel own 42% each while Idea owns 11.15%. US private equity firm Providence owns the balance 4.85%.
Indus Towers is the world’s largest telecom tower operator with more than 123,000 towers and with Bharti Infratel’s 39,264 towers, its reach and strength will be unmatchable. Post acquisition, Bharti Infratel will control 40.8% of telecom towers in India.
The move to acquire Indus Towers was anticipated in the wake of a merger between Vodafone India and Idea Cellular, which aims to create India’s largest telecom company.
The Vodafone-Idea merger—expected to be completed in 2018—does not include the tower assets of Vodafone in Indus or the towers that the company owns on a standalone basis so that Vodafone India’s valuation could be brought down on a par with that of Idea Cellular for the merger to go through.
Once the Vodafone-Idea merger is completed, quite naturally, Idea and Vodafone will have more stake in Indus than Airtel, which meant one of the two companies, either the merged entity or Airtel would have to exit the tower operator.
