Airtel buys Aircel's 4G spectrum for Rs 3,500 cr

Acquires 2,300-MHz band in 8 circles to become pan-India 4G operator

The country's largest telecom service provider Bharti Airtel has entered into an agreement with Aircel to acquire its 2,300-MHz spectrum band in eight circles for Rs 3,500 crore. The acquisition will enable Bharti Airtel to become a pan-India 4G operator.

Ahead of the launch of 4G services by Mukesh Ambani's Reliance Jio, Airtel has been aggressively increasing its spectrum portfolio to become a pan-India data player.

In March, Bharti Airtel announced a deal to buy the entire spectrum of Videocon Telecommunications in the 1,800-MHz band for Rs 4,428 crore.

After this deal, Bharti's spectrum holdings will reach 770 MHz, against Reliance Jio's 640 MHz, according to industry estimates. Bharti has 18 per cent of the total airwaves available in the country.

The government had allowed spectrum sharing and trading amongst operators in October last year. In a notification to stock exchanges on Friday, Bharti Airtel said it has signed a definitive agreement with Aircel and its subsidiaries Dishnet Wireless and Aircel Cellular to acquire rights to use the 20 MHz 2,300-band 4G TD spectrum in eight circles.

These eight circles are Tamil Nadu (including Chennai), Bihar, Jammu and Kashmir, West Bengal, Assam, North East, Andhra Pradesh and Odisha. The spectrum has validity till September 2030.

Earlier, the Videocon deal gave Airtel additional spectrum in the 1,800-MHz band in six circles - Bihar, Haryana, Madhya Pradesh, Eastern Uttar Pradesh, Western Uttar Pradesh and Gujarat. This spectrum is valid up to December 2032.

In May 2015, Bharti had acquired Augure Wireless for about Rs 150 crore. It had 2300-MHz spectrum in Madhya Pradesh.

BHARTI EMERGES KING OF SPECTRUM

• Bharti to acquire Aircel’s spectrum in 2,300-MHz band across eight circles —  Tamil Nadu (including Chennai), Bihar, Jammu and Kashmir, West Bengal, Assam, North East, Andhra Pradesh and Odisha
• In March, it bought entire spectrum of Videocon in 1,800-MHz band for Rs 4,428 crore
• Videocon deal gave it spectrum in 1,800-MHz band in six circles — Bihar, Haryana, Madhya Pradesh, Eastern Uttar Pradesh, Western Uttar Pradesh and Gujarat
• Bharti’s spectrum holdings to reach 770 MHz, against Reliance Jio’s 640 MHz
• It owns 18 per cent of total airwaves available in the country
• Bharti, like Jio, can now offer 4G data services in all 22 circles. However, Bharti has an edge in voice services, with large 2G and 3G holdings

Experts say the spectrum trading policy has spurred consolidation in India's telecom sector where as many as 11-12 operators, most of whom are debt-ridden, are offering services at low rates and struggling to remain profitable.

"The transfer of the right to use for the circles of Andhra Pradesh and Odisha is subject to the revision of spectrum caps with the upcoming auction to be conducted by the telecom department," Airtel said.

The closing of the transaction is subject to satisfaction of the standard conditions, including those stated in the spectrum trading guidelines.

"Bharti will have better leverage on how to use spectrum across 2G, 3G and 4G services. This is critical when traffic is changing from voice to data," said Amresh Nandan, research director (communications services) at Gartner. In November last year, Reliance Communications had announced that it was acquiring Sistema Shyam TeleServices, which operates communications services under MTS. The deal gave Reliance Communications access to spectrum in nine circles. Reliance Communications and Aircel are in talks to merge their wireless operations but the high debt of Aircel has been one of the biggest hurdles. Aircel's spectrum trading deal with Airtel might help in taking the merger talks ahead.

BHARTI EMERGES KING OF SPECTRUM
| Bharti to acquire Aircel's spectrum in 2,300-MHz band across eight circles - Tamil Nadu (including Chennai), Bihar, Jammu and Kashmir, West Bengal, Assam, North East, Andhra Pradesh and Odisha
| In March, it bought entire spectrum of Videocon in 1,800-MHz band for Rs 4,428 crore
| Videocon deal gave it spectrum in 1,800-MHz band in six circles - Bihar, Haryana, Madhya Pradesh, Eastern Uttar Pradesh, Western Uttar Pradesh and Gujarat
| Bharti's spectrum holdings to reach 770 MHz, against Reliance Jio's 640 MHz
| It owns 18 per cent of total airwaves available in the country

| Bharti, like Jio, can now offer 4G data services in all 22 circles. However, Bharti has an edge in voice services, with large 2G and 3G holdings