Vodafone India India's profit before taxes dives 39 per cent

The tower business will be sold at an enterprise value of 40 billion rupees ($613 million) to ATC Telecom Infrastructure Pvt Ltd, a unit of American Tower Corp, Idea Cellular said in a statement.

Vodafone will get about Rs. 3,850 crore while Idea Cellular will get its share of Rs. 4,000 crore from the transaction - both after adjustments for debt and cash.

"Both Vodafone India and Idea as customers, and ATC as a mobile network infrastructure provider, have agreed to treat each other as long-term preferred partners, subject to existing arrangements". The tribunal headed by Sir Franklin Berman was constituted in June 2016 after Vodafone challenged India using a 2012 legislation that gave it powers to retrospectively tax deals like Vodafone's United States dollars 11-billion acquisition of 67 per cent stake in the mobile-phone business owned by Hutchison Whampoa in 2007.Vodafone challenged the demand of Rs 7,990 crore in capital gains taxes (Rs 22,100 crore after including interest and penalty) under the Netherlands-India Bilateral Investment Treaty (BIT).

"This transaction follows the Vodafone India/Idea merger announcement of 20 March, 2017 whereby the parties announced their intention to sell their individual standalone tower businesses to strengthen the balance sheet of the combined business", it said.

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Idea and Vodafone Group's India unit are on track to merge operations in a deal valued at $23 billion, possibly creating the country's biggest telecom player.

The deal, which is expected to be completed in the first half of 2018, will consolidate ATC's position as the second-largest telecom tower company with about 80,000 towers. The American company had earlier acquired a controlling stake in Viom Networks.

"We expect the addition of these two high-quality portfolios.to contribute to long-term leasing growth as India's leading mobile operators accelerate their 4G network deployments", said Jim Taiclet, CEO, American Tower Corporation.

Service revenue fell 15.8 per cent to Rs 19,002 crore in H1, while Ebidta plunged 39.2 per cent to Rs 4,075 crore from Rs 6,704 crore, it said in a statement.

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