Vodafone-Idea demerges fibre into separate unit

After Merger With Vodafone Group, Idea Cellular Becomes ‘Vodafone Idea Limited’

KOLKATA: Vodafone Idea has demerged its fibre infrastructure enterprise by transferring such belongings to a wholly-owned unit, Vodafone Towers Ltd (VTL).

The transfer units the stage for an early sale of Vodafone Idea’s fibre belongings because the Telecom market chief urgently wants to usher in money to counter brutal competitors from Reliance Jio and Bharti Airtel.

Vodafone Idea’s board of administrators has accredited “an arrangement for transfer of the company’s fibre infrastructure undertaking to its wholly-owned subsidiary, VTL,” the corporate mentioned in a regulatory submitting on Bombay Stock Exchange Thursday.

VIL shares closed 0.40% decrease at Rs 37.75 on BSE.

Vodafone Idea has 1,56,000 kms of fibre community belongings — bulk of it on inter-city routes – that’s used for backhaul capability.

Earlier this month, Vodafone Idea had introduced plans to monetise its fibre belongings – estimated to be price roughly $430-450 million — alongside plans to rearrange a Rs 25,000 crore fairness fund-raise to bolster its steadiness sheet and meet future capex wants to spice up 4G protection in its efforts to meet up with Jio and Airtel.

Vodafone Idea mentioned “the rationale for the demerger” is to sharpen concentrate on fibre infrastructure enterprise to attain better infrastructure sharing, operational efficiencies and price optimisation,” which might end in supply of extra “affordable Telecom services”.

ET had reported in its November 28 version about VIL transferring its fibre belongings to a wholly-owned arm. In its November 16 version, the paper had reported, citing analysts, that tower firm Bharti Infratel is a probable frontrunner to purchase VIL’s fibre belongings, particularly since fiberised towers can enhance the 4G expertise amid surging demand for information providers.

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