Airtel to buy Aircel 4G airwaves for Rs 3,500cr

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Mumbai: Bharti Airtel Ltd said on Friday that it will spend Rs.3,500 crore to acquire the rights to use fourth-generation (4G) spectrum in eight telecom circles, making India’s largest mobile phone operator a pan-India 4G operator.

In a filing to stock exchanges, Bharti Airtel said the company and its subsidiary Bharti Hexacom Ltd on Thursday entered into a definitive agreement with Aircel Ltd and its subsidiaries Dishnet Wireless Ltd and Aircel Cellular Ltd to acquire rights to use 20 megahertz (MHz) 2300 band 4G TD spectrum in the eight circles.

These circles are Tamil Nadu (including Chennai), Bihar, Jammu and Kashmir, West Bengal, Assam, the North-East, Andhra Pradesh and Orissa.

The spectrum was allotted to Aircel and Dishnet by the ministry of communications and information technology and is valid up to 20 September 2030.

“The transfer of the right to use for the circles of Andhra Pradesh and Orissa is subject to the revision of spectrum caps with the upcoming auction to be conducted by department of telecommunication,” Bharti Airtel said.

Last month, Bharti Airtel agreed to buy rival Videocon Telecommunications Ltd’s entire spectrum for Rs.4,428 crore, the second such acquisition in India’s fragmented telecom sector after the government allowed trading of airwaves in October.

Spectrum trading rules have finally spurred consolidation in India’s telecom sector, where as many as 11 operators are competing, driving down prices and profits, even as the high cost of spectrum is adding pressure on already stressed balance sheets.

The operators have a combined debt of more than Rs.3.5 trillion on revenue of more than Rs.2 trillion.

The latest deal is also an example of moves that India’s leading telcos are making to defend their market share after billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd enters the market later this year.

 

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