India’s Vodafone Idea has completed a demerger of its fiber assets into a separate business unit named Vodafone Towers Limited.
The operator has announced plans to monetize its fiber assets to raise funds to help counter competition from arch-rivals Bharti Airtel and Reliance Jio Infocomm.
In a filing to the Bombay Stock Exchange, Vodafone Idea revealed it has transferred its fiber infrastructure to a new wholly-owned subsidiary.
According to the filing, the rationale for the demerger is to allow for a “sharper and dedicated focus on the fiber infrastructure business so as to achieve greater infrastructure sharing, operational efficiencies and cost optimization resulting in more affordable and reliable telecommunications services to its consumers.”
Vodafone Idea’s fiber assets are estimated to be worth around $430 million to $450 million.
The company is aiming to monetize these assets and raise around 250 billion rupees ($3.5 billion) in equity funding to help it expand its 4G footprint and weather India’s intensely competitive environment.
Vodafone Idea was established earlier this year through the merger between Vodafone India and Idea Cellular. Through the merger the company supplanted Airtel to become the market’s largest operator by subscribers. – Telecom Asia