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Vodafone Idea Facing Tower Fees Claim

Bharti Infratel and Indus Towers, the largest tower company in India, claim Vodafone Idea owes them a total of INR45 billion (USD 632 million) for reducing the number of tenancies per site since its merger.

Indus Towers is a joint venture between Bharti Airtel and Vodafone Idea’s two major shareholders.

The country’s largest operator by subscribers, formed in August, disputes the claim, arguing it merely converted two tenancies on a site into one with higher loading, a source told.

A representative for Vodafone Idea, which allocated INR10 billion to cover any penalties it may incur for early tenancy exits, said it couldn’t comment on the private matter between the operator and its business partners.

The country’s power industry has been hit hard by consolidation among mobile operators (down to five players from ten about a year ago) with co-locations declining sharply and revenue plummeting. In Q3 2018 Bharti Infratel’s co-locations were down 17.2 percent year-on-year to about 78,000, and Indus Tower’s were 23.3 percent lower at 229,960.

Analyst company Crisil estimates rentals per tower in India will decrease by between 7 percent and 9 percent in fiscal 2019 (ending 30 March).

Vodafone Idea plans to sell its 11 percent interest in Indus Towers, valued at an estimated INR50 billion, to reduce its debt of INR1.26 trillion.―Mobile World Live

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