Vodafone India and Idea CellularBSE 0.95 % have put their standalone tower sale plans on fast-track by giving formal mandates to investment banks Morgan Stanley and Bank of America-Merrill Lynch to finalise buyers, two people with knowledge of the matter said.
Vodafone, the nation’s No. 2 mobile carrier, asked Morgan Stanley to zero in on a buyer for its 11,000-odd towers while third largest Idea hired Bank of America-Merrill Lynch to seek a buyer for its nearly 9,900 captive towers, they said.
Vodafone and Idea, they said, are keen to wrap up the tower deals ahead of their mega-merger, which will create India’s biggest phone company. The merger is expected to close by mid-2018. The two telcos have already been talking to potential buyers, including Canada’s Brookfield and American Tower Corp, on towers.
Separately, Vodafone is learnt to have asked Morgan Stanley to scout for a potential buyer for its 42% stake in Indus Towers, one of the two people said. Indus is three-way joint venture tower company, also involving Bharti Infratel and Idea. UK’s Vodafone Group Plc has kept its Indus stake outside the proposed Vodafone India-Idea combined entity.
Idea’s standalone telecom towers are held through wholly-owned arm Idea Cellular Infrastructure Services Ltd.
Morgan Stanley and BofA-ML said they would not offer comment to ET’s queries. A Vodafone Group spokesman also said the UK-based mobile carrier would not comment. Idea did not reply to emails. ATC and Brookfield also did not offer comments until press time Friday.
A third person familiar with the discussions, though, sees valuation as a big hurdle to a quick closure of the deals. The enterprise valuations of these captive towers are reckoned to have shrunk for a combination of reasons, he said.
Post the Vodafone-Idea merger, there is a prospect of direct overlaps of nearly 1 lakh sites, including of Indus, this person said. Also, many of these standalone towers are not designed for sharing, which would automatically reduce their valuation as the buyer will need to invest substantially on refurbishing them to enable multi sharing, he added.
