NCLT Nod for Vodafone Idea to Hive Off Fiber Assets into Separate Entity – CORPORATE ETHOS

NCLT Nod for Vodafone Idea to Hive Off Fiber Assets into Separate Entity

By: | June 12, 2019

June 12: Vodafone Idea has received permission from the National Company Law Tribunal (NCLT) to hive off its fiber possessions into a separate entity named Vodafone Towers. With the hive off, the company aims to attain operative efficiency and also monetization of the assets. It is estimated that over 1.56 lakh route kilometer of fiber assets backed by the company are worth the value of around Rs 15,000 crore.

All methods to monetize the assets, including the establishment of a joint venture with Bharti Airtel on the lines of Indus Towers are analyzed by Vodafone Idea. Recently, Balesh Sharma, CEO of Vodafone Idea had stated that when it comes to the fiber assets all the option available is under consideration. He added that developing a joint venture with Airtel is also considered but did not take any final decisions o the same.

Around 2.46 lakh route kilometer fiber assets are owned by Airtel. Reliance Jio will face a huge competition if Vodafone Idea and Airtel join hands to form a joint venture. The fiber assets of Reliance Jio lies around 3 lakh route kilometer. Separate entities for fiber assets are being set up by Reliance Jio and Airtel.

Airtel had made announcements that it is to transfer its optical fiber business to a wholly-owned subsidiary Telesonic Networks. In order to achieve capacity, Airtel had also asked Vodafone Idea to join the fiber assets to the new entity.

Sunil Bharti Mittal, Chairman at Bharti Airtel, a few months ago talking about the fiber company had said that they have asked Vodafone Idea to join the same. Vodafone and Idea Cellular have stakes in the Indus Towers to join which they have received the invitation. He had also said that Telesonic, as of now, is a subsidiary of Airtel and if Vodafone wishes to join, a new structure will be in form.