Telecom network operator Bharti Airtel announced its deal with Aircel to acquire its 4G spectrum in eight circles for Rs 3,500 crore through spectrum trading agreement.
The spectrum deal will enable Bharti Airtel, the number one 4G operator in India based on coverage, to use 20 MHz of 2300 band 4G spectrum for eight circles such as Tamil Nadu including Chennai, Bihar, Jammu & Kashmir, West Bengal, Assam, North East, Andhra Pradesh and Orissa. Bharti Airtel can use the 4G spectrum till September 20, 2030.
How Airtel expands 4G
# Airtel acquires spectrum in four circles for Rs 3,314 crore during auction in 2010
# Airtel buys spectrum in four circles from Qualcomm in 2013
# Airtel acquires Videocon’s 4G spectrum in 1800 MHz band for Rs 4,428 crore
# Airtel buys Aircel’s 4G spectrum for Rs 3,500 crore
Bharti Airtel did not pay any premium to buy the 4G spectrum since Aircel acquired spectrum in the 2300 MHz band for Rs 3,438 crore during the spectrum auction in 2010. Aircel did not utilize the 4G airwaves till now for mobile broadband services. The main aim of Aircel was to launch WiMax services using the 2300 MHz band.
With this acquisition, the Sunil Mittal promoted telecom service provider will become a pan India 4G operator. At present, Mukesh Ambani-promoted Reliance Jio Infocomm is the only pan India 4G telecom operator. The deal indicates that 4G started paying returns to Indian telecoms.
A statement from Bharti Airtel on Friday said that 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 the telecom department.
With the 4G deal with Airtel, the brand Aircel will likely to disappear from India since the Maxis joint venture is already in negotiations with Reliance Communication, a telecom venture operated by Anil Ambani, brother of Mukesh Ambani, to sell the business.
Aircel aims to reduce some of its Rs 20,000 crore debt with the 4G deal.
Airtel on 4G expansion spree
Last month, Bharti Airtel acquired Videocon’s 4G spectrum in the 1800 MHz band in six telecom circles for Rs 4,428 crore. Airtel paid almost double the amount paid by Videocon Telecom. Airtel acquired 4G airwaves from Videocon after Idea Cellular pulled out of the deal.
Earlier, Bharti Airtel acquired the BWA spectrum in four circles for Rs 3,314 crore during the spectrum auction in 2010. At present, Airtel has 4G coverage in around 500 towns.
Reliance Jio Infocomm, which aims to invest $20 billion in its 4G business, acquired 4G spectrum across all the circles for over Rs 12,800 crore in 2010. Airtel purchased four circles from chipset maker Qualcomm in 2013, for undisclosed amount, taking the 4G footprint to 8 circles.
The Aircel deal indicates the eagerness of Sunil Mittal to be the leader in the Indian mobile broadband space.
The Kumar Mangalam Birla promoted Idea Cellular started 4G operations in 575 towns across its 10 telecom circles. Vodafone India has 4G presence in five telecom circles.
Recently, financial services firm UBS said the size of the Indian data market will grow nine times to $38 billion by 2026.
Baburajan K
editor@telecomlead.com
