Bharti Infratel and Indus Towers, the largest tower company in India, claim Vodafone Idea owes them a total of INR45 billion ($632 million) for reducing the number of tenancies per site since its merger, The Economic Times (ET) reported.
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 2018, disputes the claim, arguing it merely converted two tenancies on a site into one with a higher loading, a source told ET.
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 tower 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 per cent year-on-year to about 78,000, and Indus Tower’s were 23.3 per cent lower at 229,960.
Analyst company Crisil estimates rentals per tower in India will decrease by between 7 per cent and 9 per cent in fiscal 2019 (ending 30 March).
Vodafone Idea plans to sell its 11 per cent interest in Indus Towers, valued at an estimated INR50 billion, to reduce its debt of INR1.26 trillion.