Airtel to sell $1 bn stake in tower arm

India's leading mobile operator, Bharti Airtel Ltd, said on Friday seven international investors, including Temasek and Goldman Sachs, had agreed to buy up to 9 per cent in its tower arm for a total $1 billion, valuing the unit at up to $12.5 billion.

Bharti Airtel said Temasek Holdings would be the largest investor in the tower company, Bharti Infratel. Other investors were Macquarie, Citigroup, India Equity Partners, Investment Corporation of Dubai and AIF Capital.

"The enterprise valuation has been agreed to be in the range of $10 to $12.5 billion, and the final valuation, within this range, will be determined on the basis of Bharti Infratel's actual operating performance in fiscal year 2008-09," Bharti Airtel said in a statement.

Bharti Infratel owns about 20,000 towers and holds about 42 per cent in a joint-venture tower company with Vodafone and Idea, which has about 70,000 towers.

No 2 mobile operator Reliance Communications in July sold a 5 per cent stake in its tower unit, valuing the business at about $6.9 billion, and has said it could sell more through an IPO or further placements.

India is the world's fastest-growing mobile services market, with about 8 million subscribers signing up each month lured by tariffs as low as one US cent a minute and the extension of networks to rural areas as operators move away from cities.

Telecoms operators are sharing infrastructure such as mobile towers to keep costs down and boost profits amid intense price competition and a surge in low-income subscribers. Ahead of the announcement, shares in Bharti fell 2.7 per cent to Rs 940.70 in a flat Mumbai market.

source: ET