Idea Cellular to hive off tower business

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Mumbai, Sept. 10

The board of Idea Cellular on Monday decided to demerge the passive infrastructure of the company into a wholly owned subsidiary.

In July, the board had approved the formation of a separate wholly owned arm for a possible transfer of its GSM infrastructure business.

The AV Birla group company is following the trend among wireless telephony operators in the country to separate their infrastructure operations, thereby allowing for infrastructure sharing among themselves, which in turn leads to reduction in capital costs.

Reliance Communications and Airtel have already demerged their infrastructure operations.

'Infrastructure' would consist of tower, generator and other non-core telecom network related assets of a wireless operator.

Such a demerger also helps companies to monetise their assets.

RCom recently placed a 5 per cent equity stake in its infrastructure business with private equity investors for Rs 1,400 crore.

The demerged companies can also now compete with pure-play infrastructure companies such as Essar Telecom Tower & Infrastructure and GTL Ltd .

Taken from Business Line

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