The National Company Law Tribunal (NCLT) has granted approval to Vodafone Idea to hive off its fibre assets into a separate entity named Vodafone Towers. The move to hive off the fibre business was to achieve operational efficiency and also monetisation of the assets. As per estimates, around 1.56 lakh route kilometre of fibre assets owned by the company are worth around Rs 15,000 crore.
The company is exploring all options to monetise the assets, including forming a joint venture with Bharti Airtel on the lines of Indus Towers. Vodafone Idea’s CEO Balesh Sharma recently said all the options are being considered for fibre assets, including forming a joint venture with Airtel but no final decision has been taken.
Airtel has around 2.46 lakh route kilometre fibre assets and in case both the companies decide to form a joint venture, it will give tough competition to Reliance Jio, which has fibre to the tune of 3 lakh route kilometre. Airtel and Reliance Jio are also setting up separate entities for fibre assets.
Airtel had announced to transfer its optical fibre business to a wholly-owned subsidiary Telesonic Networks. Airtel had also asked Vodafone Idea to combine their fibre assets with the new entity in order to achieve capacity. “We will have our fibre company in place and in that we have invited Vodafone to come and join. The invitation is on the same lines of Indus Towers where Vodafone and Idea Cellular have stakes. Currently, Telesonic is a subsidiary of Airtel and if Vodafone wants to come, there will be a new structure,” Bharti Airtel chairman Sunil Bharti Mittal had said a few months ago.
Asked about a possible deal with Reliance Jio, he had said that from their point of view ‘the more the merrier’.
“…one fibre company will be perfect. We will first get the Vodafone thing going and will see after that,” Mittal had said.―Financial Express