The two operators own about 20,000 towers.
In the event that the completion of the sale of the standalone tower businesses precedes the completion of the proposed merger of Vodafone India and Idea, Vodafone India will receive Rs 3,850 crore ($592 million) and Idea will receive Rs 4,000 crore ($615 million). "The parties will work together to further the expansion of high speed mobile networks in India", the statement mentioned.
The Tower purchase would give Boston-based ATC, which operates nearly 150,000 communications sites globally, an additional 20,000 towers in a country with more than 1 billion mobile-phone subscribers.
The sale of tower businesses by the mobile operators comes after cut-throat pricing unleashed by new entrant Reliance Jio Infocomm, backed by billionaire Mukesh Ambani's Reliance Industries, roiled the industry.
In 2015, ATC agreed to acquire a controlling stake in Viom Networks Ltd for $1.2 billion.
Shares of Idea Cellular were trading at Rs 94.90 a piece, down by 2.22% on the BSE in the early trading hours Monday.
As part of the transactions, Vodafone and Idea Cellular would get the service level and process efficiency benefits from American Tower, means these two telecom operators would continue to get usual service from these tower sites. Jio's pricing strategy has hurt rivals' profits as they try to match low tariffs and also pushed some carriers to consolidate operations.
Idea and Vodafone India have a total of about 20,000 towers, with 1.65 tenants each on average, as of 30 June 2017.
Indus-the biggest tower company-is a three-way joint venture among Idea, Vodafone and Bharti Airtel, which also controls Bharti Infratel.
American Tower's deal is expected to close in the first half of next year, and generate about $320M in property revenue and $120M in gross profits for the first full year.