The cash inflow will undoubtedly help in reducing debt and provide—at least in the case of Bharti Airtel—ammunition for investments in its network. In addition, Vodafone and Idea’s debt-Ebitda ratio has now worsened to such an extent that the tower deal can only go so far in helping them. If these companies also agree to pay higher rentals in the future, there’s further trouble waiting down the road as well. At best, the tower deal can bring this down to around eight times, which is still far higher than levels that will give lenders comfort. Of course, all this is not to say that the tower deal isn’t a good development for telcos.
Source: Mint October 12, 2017 06:57 UTC