Vodafone India completes €478mn tower sale

Vodafone has announced the completion of the sale of its Indian tower business to American Tower in a move to build the spreadsheets in preparation for the Jio battle.

The plan was initially set in motion back in January as Idea kicked off a number of initiatives to improve its financial position ahead of the merger with Vodafone. Assets are being hurled overboard as both parties streamline their organizations to ensure a healthy financial and operational position to tackle the Jio problem.

Today’s announcement will see American Tower complete the acquisition of the standalone tower business of Vodafone India for an enterprise value of €478 million, before turning its attention to finalizing the acquisition of Idea’s tower unit.

While the introduction of Jio ruined a perfectly comfortable position for Vodafone India and Idea, you can’t say the pair are not doing everything possible to meet the challenge. Aside from the merger, which is set to complete in the second half of the year, selling off assets would have been tough decisions to make. With the €478 million made of this deal, Idea will also be aiming to bring €882 million through sales of equity and assets.

Consolidation and divestment are two very common trends in the Indian telco industry right now, but these deals are nothing but the preliminaries. Jio might be in a relatively comfortable position right now, but the new Vodafone/Idea entity is working up a war chest to disrupt the space. One of the big questions which remain is whether Jio can entrench its position deep enough in the Indian consumers life to withstand the Vodafone/Idea assault.