ATC leads race for Idea Cellular’s telecom towers

MUMBAI: American Tower Corporation ( ATC), one of the world’s largest independent tower companies, has emerged as the frontrunner to buy Idea Cellular’s telecom towers at an enterprise value of as much as Rs 4,500 crore, multiple sources with knowledge of the matter said.

The Aditya Birla flagship had reorganised its telecom towers portfolio last year with an eye on monetising the business. It had hired Bank of America Merrill Lynch to find a buyer.

Idea Cellular Infrastructure Services, a wholly owned unit of Idea Cellular, operates 9,772 towers. Idea has been in discussions with Bharti Infratel and a few private equity players including Blackstone and Carlyle to sell it, but ATC trumped competition with a bid of Rs 4,300-4,500 crore, subject to final due diligence, the sources said.

Idea didn’t respond to ET’s queries and an ATC spokesperson declined to comment. A Blackstone spokesperson offered no comments, while Carlyle didn’t respond until press time Monday to an email seeking comment.



The towers had a rental factor of 1.68 each as of September end. This puts it operating profit at around `430 crore which can be benchmarked with the trading multiple of listed Bharti Infratel to establish a valuation, one of the sources said. “A little cash in the company will give Idea muscle to fight tariff wars that will get on way come April.”

If they go ahead with the deal, it would become the second large India takeover by ATC. Last year, it took control of Viom Networks at an enterprise value of Rs 21,000 crore.

Enterprise value includes the value of both equity and outstanding debt, minus cash held by the target company. ET in its October 5 edition was the first to report that the Birla group was planning to rejig its towers portfolio to unlock value.

Idea Cellular also holds 16% of Indus Towers, a joint venture with Bharti Infratel and Vodafone, but had sold the equivalent of a 4.85% stake of that to private equity Providence in 2008.