Idea Cellular in talks with Axiata of Malaysia to sell tower biz

Telecom Lead India: Idea Cellular has renewed talks with Axiata of Malaysia for selling its tower business to the Malaysian company.

Axiata is the second-largest shareholder of Idea Cellular, an Aditya Birla group-owned mobile operator.

Idea Cellular is keen to divest its 9,400 towers to raise funds for capital expenditure, license renewals, as well as purchase of spectrum. Idea Cellular’s Capex (Capital expenditure) for the current fiscal is Rs 3,500 crore.

Axiata officials are scheduled to arrive in India in the next few weeks to take the negotiations further. While the two companies have been in discussions for the past many months, it is possible that the talks could convert into a concrete deal during this visit.

Recently, American Tower Corp has been in talks with TowerVision India to purchase towers at around Rs 40 lakh per installation, Economic Times reported on Tuesday.

Axiata has controlling interests in mobile operators in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia with significant strategic stakes in India, Singapore and Iran. XL Axiata is currently seeking bank loans to help it refinance $468 million worth of debt maturing in 2013.

Equity advisory firm CIMB, in a January 2013 note, said that Capex of Axiata Group in FY 2013 is expected to decrease, led by XL Axiata, after spiking up in 2012. XL’s FY 2013 capex could fall 35 percent to the FY 2011 level. XL raised its capex by 25 percent to $1 billion in FY 2012 by bringing forward FY 2013 capex to accelerate its 3G network rollout as it expects strong demand.

Axiata plans to create a tower company that will span countries across South Asia, including Bangladesh, Sri Lanka, Indonesia and India. The objective was to have around 100,000 towers across the region and then publicly list the entity. But the Malaysian company is not interested in running the towers itself and has spoken to third-party tower management companies, including Tata Group-owned Viom Networks, for outsourcing the management of these installations.
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