The telecom market structure has started to stabilise on account of the efforts of the Government of India including the recent relief package. We support the Government’s desire to have three private operators to serve the Indian telecom market which is also in the best interest of Indus Towers. With the likely introduction of 5G in the future, we believe a lot more infrastructure would be required in which Indus Towers, an undisputed leader, has a significant role to play and partake the potential growth in the business.

The stability and sustenance of a specialised and strong infrastructure company like Indus Towers is vital for a continued strong provision of co-location services including the support to rollout 5G. Such stability warrants a strong and stable shareholding structure to ensure financial stability and flexibility to respond to evolving needs of telecom operators.

Bharti Airtel has accordingly entered into an agreement with Vodafone to buy 4.7% equity interest in Indus Towers on the principal condition that the amount paid shall be inducted by Vodafone as fresh equity in Vodafone Idea Ltd. (VIL) and simultaneously remitted to Indus Towers to clear VIL’s outstanding dues. The said acquisition purchase would be at an attractive price representing a significant discount typically available for such large block transactions. In addition, Airtel is also protected with a capped price which is lower than the price for the block of Indus shares sold by Vodafone on February 24, 2022. This shall be value accretive to Airtel and protect its existing significant shareholding in Indus Towers.

Any such acquisition shall only be done when such proceeds are confirmed to be utilised by Vodafone to infuse as equity into VIL including any regulatory or shareholders’ approval being fully obtained.

We believe this transaction allows Airtel to secure continued strong provision of services from Indus Towers, protects and enhances Airtel’s value in Indus Towers, enables it to receive rich dividends and as also paves the way for subsequent financial consolidation of Indus Towers in Airtel. We believe that this self-paying capital allocation serves multiple strategic purposes for Airtel.

Airtel remains committed to look at opportunities for monetizing this vital asset at an appropriate time. In doing so it will ensure that the tower company has been stabilized and any new strategic or financial investor/s has the ability to continue to serve the critical needs of Airtel.