STOCK MARKET BSE NSE

Idea Cellular posts quarterly loss; to sell tower unit  

Idea Cellular reported a fourth straight quarterly loss on Monday as intense competition in the telecom sector continued to hurt

Published: 13th November 2017 05:24 PM  |   Last Updated: 13th November 2017 05:24 PM   |  A+A-

A shop displaying the Idea Cellular Ltd's logo on its shutter. (File | Reuters)

By Reuters

Idea Cellular reported a fourth straight quarterly loss on Monday 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.

QUARTERLY LOSS

Idea, India's No. 3 wireless carrier posted a loss of 11.07 billion rupees ($169.45 million) in the quarter ended Sept. 30, compared with a profit of 915 million rupees a year earlier. (http://bit.ly/2i9WwuO)

Analysts on average expected the company to post a loss of 11.25 billion rupees, according to Thomson Reuters data.

Shares in Idea fell 3.1 percent on Monday morning following the quarterly results.

"The stock decline this morning is only sort of a knee-jerk reaction to the quarterly loss," Geojit analyst Shah said.

More from Business.

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

IPL_2020
flipboard facebook twitter whatsapp