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Idea Cellular Posts Quarterly Loss; To Sell Tower Unit

"In the long term, we have a positive view on Idea and the deal could be viewed as a positive move with the 40 billion rupee-transaction value aiding Idea in cutting down its balance sheet debt," said Gaurang Shah, Head-Investment Strategist at Geojit Financial Services

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Idea Cellular reported a fourth straight quarterly loss on Nov 13 as intense competition in the telecom sector continued to hurt and said it would sell its tower business to reduce debt. 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. 

"In the long term, we have a positive view on Idea and the deal could be viewed as a positive move with the 40 billion rupee-transaction value aiding Idea in cutting down its balance sheet debt," said Gaurang Shah, Head-Investment Strategist at Geojit Financial Services.

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 is expected to close in 2018. Vodafone India has also agreed to sell its standalone tower business to ATC Telecom for an enterprise value of 38.50 billion rupees.

India, the world's No.2 mobile phone market, has been rattled by the aggressive pricing of Jio, the telecoms arm of billionaire Mukesh Ambani-controlled Reliance Industries. Jio's pricing strategy has hurt rivals' profits as they try to match low tariffs and also pushed some carriers to consolidate operations.


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