Bharti Infratel and Indus Towers Merger: CCI Grants Clearance

Bharti Infratel, the tower subsidiary of Bharti Airtel, is set to undergo a merger with Indus Towers for which both the companies have obtained clearance from Competition Commission of India (CCI). Post the merger, both the companies will fuse to form $14.6 billion entity owning 1.63 lakh towers, a massive figure speaking even from global standards. This approval from CCI is the first of many which both the companies will need to have it under them if they want to move ahead with the merger. In addition to the CCI clearance both the companies will need the Securities & Exchange Board of India, National Company Law Tribunal and the department of telecommunications (DoT) to sign off on the merger. While the others will look into different aspects of the merger, DoT will sign off on the FDI aspect of the combined entity.

Tower

Bharti Airtel in its official statement said “Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, we are pleased to inform you that approval of Competition Commission of India (CCI) has been received for the proposed merger of Bharti Infratel Limited and Indus Towers Limited.”

Interestingly, the company which is going to merge with Bharti Infratel, Indus Towers counts Bharti Airtel, Idea Cellular and Vodafone India as its shareholders. As such, this merger is going to mean enhanced control over towers and monetisation of their stakes in the company during present tough times. This move might prove beneficial for all the three telcos since the telecom sector is in a condition of unrest, the reason being heavy losses and poor financials. Current stake-holding in Indus Towers comprises of Bharti Infratel (42%), Vodafone (42%), Aditya Birla’s Idea group (11.15%) and Providence (4.85%).

As per the current stipulated timeline, the merger process will finish before the end of FY 2018-19.

Idea Cellular, which holds 11.15% in Indus will have the option of getting a 7.1% stake in the new company, or it will also be able to sell out for Rs 6,500 crore. Idea Cellular had earlier said it would exit the tower unit. Being equal shareholders in Indus, Bharti Airtel and Vodafone will take control of the merged entity proclaiming equal representation in board too.

A lot of structure and stakeholding of the company will be dependent on Idea’s decision to retain or sell the shares. Depending on that, Bharti Airtel will own either 37.2% or 33.8% in the combined entity, and Vodafone will hold 29.4% or 26.7%. On the other hand, private equity major KKR and Canada Pension Plan Investment Board (CPPIB) will together own 6%. Providence will retain a minimum 1.1% or opt to maintain its full stake in the combined company, which will be 3.1%. The remaining shareholding will be up for the public.

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17 Comments on "Bharti Infratel and Indus Towers Merger: CCI Grants Clearance"

 

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Stephen (Airtel|Idea)
July 2, 2018 9:55 pm 9:55 PM

Can someone elborate what’s the deal with Jio network. I can understand it’s congested but even at night time the speed barely increases. Even at good open and dense city hotspots. Sometimes the speed is quite good but almost 90pr of the time it’s 1 to 2mbps.

Also, while legacy operators cover the same handset with 1 or 2 towers switching inbetween, Jio covers it with 7 to 10 towers continuously switching on band, configuration and power.

What’s the deal with Jio? Too many people or bad network planning?

Terve
July 3, 2018 6:58 pm 6:58 PM

Jio is throttling data speeds to 1-2 Mbps

Kirti Delhi
July 3, 2018 1:32 am 1:32 AM
Jio isn’t using quality equipments, I’m telling you from my experience over 2+ years with Jio. I got first Jio sim during employee reference plan. Then the were hardy a hundred people were there on any given tower over 2 years ago compared to now almost 10xthousand. BUT does was barely 8-10 mbps on lower bands like B5 & B3, while Band 40 was 20-50 mbps. This is when Jio was totally empty. NOW speed won’t go beyond 0.30 MBPS give or take on any Band. Here in Delhi Airtel’s Band 3 which has only 5 MHz B.W. gives 30+… Read more »
Terve
July 3, 2018 7:01 pm 7:01 PM

I totally agree with you. Jio is pathetic in most of Delhi. Airtel works fine with at least 5-10 Mbps minimum wherever it has coverage

Sunny | Lucknow
July 3, 2018 12:31 am 12:31 AM

They must be adding nearly 1 crore users per month so what else do you expect :/ Things seem to be going out of their hands right now. I had a chat with a RF guy I know and he said that they’ve been adding sites nonstop but nothing seems to be enough. Ambani seems to have given them a crazy task. Stay patient and use the network that’s best in your area. Speeds will remain like this for a while. One advantage that Airtel has is newer hardware only because they started late.

Abhishek UPE
July 2, 2018 10:49 pm 10:49 PM

facing same problem..using OnePlus 6.. Jio tower is hardly 120 meters away from my house .. still band switching is frequent.. getting 4-5 Mbps on Band 40, 2 Mbps on Band 3 and 0.30 Mbps on Band 5 max (CA implemented tower) .. but the problem is, phone latches to Band 5 most of the time.. what kind of network is this.? Vodafone tower is far away from my house, approx 500 meters.. still getting good 4g signal and decent speed.. minimum 4 Mbps even during peak hours..

Sunny | Lucknow
July 3, 2018 12:32 am 12:32 AM

Band locking is the only solution. At least you have some control then.

Abhishek UPE
July 3, 2018 12:57 am 12:57 AM

sorry sunny bhai.. but I don’t want to root my new mobile 🙁

Kiran Fernandes | Goa
July 3, 2018 2:53 am 2:53 AM

which handset do you have Abhishek? Actually band unlocking is the only way to get a decent coverage as you can lock to band 40. Yeah it seems like Jio is on a crazy tower installing spree, but they’re not gonna be increasing capacity soon. Rcom spectrum for 850MHz band is expiring in 2021, and that’s when Jio will get Rcom fiber assets and all, and at that time only will they start capacity expansion.

Abhishek UPE
July 3, 2018 11:31 am 11:31 AM

i have already mentioned.. “using OnePlus 6”

kunal
July 3, 2018 6:58 am 6:58 AM

jio will get rcom 4g spectrum (122mhz) in the next few weeks. (850 mhz , 900 mhz , 1800 mhz , 2100 mhz)

Rcom has filed final settlement with minority partners in court on friday (29/6/18) .

Legally all barriers are clear for the sale of spectrum to jio.

After the 122 mhz spectrum buy , jio has already signed a deal with rcom to get their remaining non liberalise spectrum in band 5 for some 4000 crores.

Nikhil Mumbai-Pune
July 3, 2018 2:57 pm 2:57 PM

When its going to deploy that’s the question.

Chetan Malhotra
July 3, 2018 11:20 am 11:20 AM

Deal for remaining spectrum in band 5 is not signed yet Kunal. Also it is liberised already since Jio and RCOM both using it for band 3 LTE.

kunal
July 3, 2018 2:08 pm 2:08 PM

the second deal value is decided @ 3700 – 4000 crores. This actual is leaked by the lendors (sbi & other banks – secured lendors) .

They are waiting for the first transaction to go through worth 17300 crores with jio.

all the balance rcom band 5 spectrum will be transferred to jio ( as change in rules of spectrum holding limits)

Nikhil Mumbai-Pune
July 3, 2018 11:11 am 11:11 AM

Band 3 spectrum returned?

Kiran Fernandes | Goa
July 3, 2018 7:52 am 7:52 AM

Hey Kunal, thanks for the info! So this means that Jio will probably start capacity upgradation once they get Rcom spectrum! Yay! Just what I was waiting for!

But there is no non liberalised spectrum in band 5 available according to the pan India spectrum chart. All Rcom spectrum has been liberalised.

kunal
July 3, 2018 3:41 pm 3:41 PM

my mistake …band 5 is liberalised.

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