Bharti Airtel, Idea Cellular and Vodafone have agreed to merge telecom tower company Indus Towers into Airtel-owned Bharti Infratel — creating the largest telecom tower firm with annual revenues of $3.8 billion.
Bharti Infratel (42 percent), Vodafone (42 percent), Idea Group (11.15 percent) and Providence (4.85 percent) own Indus Towers. A statement from these three telecom operators indicates that Idea Cellular will exit from the telecom tower business by cash in on the equity stake.
The combined company’s equity value would be INR 965 billion or $14.6 billion.
Bharti Airtel and Vodafone will jointly control the combined telecom tower company. The announcement did not mention about any possible job cut. There is also no indication about the CEO for the new telecom tower company.
The merger of Bharti Infratel and Indus Towers will create a pan-India tower company, with over 163,000 towers, operating across all 22 telecom service areas in India. The combined company will be the largest tower company in the world outside China.
The combined company’s revenue was over INR 253 billion or $3.8 billion for the financial year ended 31 March 2018.
Bharti Infratel and Indus Towers had over 163,000 towers and 367,000 tenancies as at 31 March 2018. Indus Towers currently operates in 15 telecom circles. Bharti Infratel’s operations are focused on the remaining 7 circles. 
The combined company will be known as Indus Towers and will continue to be listed on the Indian Stock Exchanges.
The combined company will continue to offer passive infrastructure services to all telecom operators on a non-discriminatory basis.
The transaction values Indus Towers at an enterprise value of INR 715 billion or $10.8 billion or 9.3x EV/LTM EBITDA.
Airtel’s stake will be diluted from 53.5 percent in Bharti Infratel to 37.2 percent in the combined company if Providence decides to sell 3.35 percent of its 4.85 percent stake in Indus Towers for cash, and Idea decides to sell its 11.15 percent stake in Indus Towers for cash.
Baburajan K
