Bharti Airtel slips after acquiring Loop Mobile

Bharti Airtel fell 0.90% to Rs 302.35 at 10:43 IST on BSE after the company agreed to acquire smaller rival Loop Mobile.

The announcement was made during trading hours today, 18 February 2014.

Meanwhile, the BSE Sensex was up 148.42 points, or 0.73%, to 20,612.48.

On BSE, so far 1.45 lakh shares were traded in the counter, compared with an average volume of 3.15 lakh shares in the past one quarter.

Trading in the counter was volatile. The stock rose 2.26% at the day's high of Rs 312 in early trade. The stock fell 1.87% at the day's low of Rs 299.40. The stock hit a 52-week high of Rs 373.50 on 1 November 2013. The stock hit a 52-week low of Rs 266.95 on 5 April 2013.

The stock had outperformed the market over the past one month till 17 February 2014, falling 1.96% compared with the Sensex's 2.85% fall. The scrip had, however, underperformed the market in past one quarter, falling 10.03% as against Sensex's 0.32% rise.

The large-cap company has an equity capital of Rs 1998.70 crore. Face value per share is Rs 5.

Bharti Airtel and Loop Mobile announced a strategic agreement for their operations in Mumbai (India) service area. Bharti Airtel, however, did not disclose how much it was paying for acquiring the assets of Loop Mobile (erstwhile BPL Mobile), which currently only operates in Mumbai, with 3 million subscribers.

The proposed association will undergo seamless integration once definitive agreements are signed, and is subject to regulatory and statutory approvals. Under the agreement, Loop Mobile's 3 million subscribers in Mumbai will join Airtel's over 4 million subscribers, creating an unmatched mobile network in Mumbai, Bharti Airtel said in a statement.

The proposed transaction will bring together Loop Mobile's 2G/EDGE enabled network supported by 2,500 plus cell sites, and Airtel's 2G and 3G network supported by over 4000 cell sites across Mumbai. It will also offer subscribers the widest exclusive retail reach with 220 outlets that will enable best-in-class customer service, Bharti Airtel said.

The agreement will ensure continuity of quality services to Loop Mobile's subscribers, while offering them the added benefits of Airtel's innovative product portfolio, and access to superior services, innovative products like 3G, 4G, Airtel Money, VAS and domestic/international roaming facilities.

Loop Mobile subscribers will become part of Airtel's global network that serves over 289 million customers in 20 countries. Globally, Airtel is ranked as the fourth largest mobile services provider in terms of subscribers, the company said.

Last week, Bharti Airtel announced that it acquired 115.0 MHz spectrum for a total consideration of Rs 18530 crore in the recently concluded spectrum auction conducted by the Government of India. Bharti Airtel said it will make an upfront payment of Rs 5425 crore, with the balance to be paid in ten annual installments of Rs 1310 crore each, commencing two years from now, the company said.

Bharti Airtel said that the company's spectrum acquisition is in line with its strategy of building a robust network of the future and enhancing its leadership position in the fast growing data segment. The company plans to roll-out high speed 4G networks in various circles using FD-LTE technology in the 1800 MHz band besides its existing TD-LTE roll-out in the 2300 MHz band, giving it a pan-India 4G footprint, Bharti Airtel said in a statement.

Bharti Airtel complimented DoT and TRAI on the successful outcome of the auction. It said that the auction has lent credence to the industry's position that reasonable reserve prices ensure successful auctions, while high reserve prices are counterproductive. It added that in most circles the auction in 1800 MHz showed a balanced approach between the revenue for the exchequer and industry viability due to ample spectrum being put up for auctions. However, the auction in 900 MHz band resulted in artificial and unrealistic prices on account of shortage of spectrum and the unenviable position of the incumbents who were forced to bid for this spectrum to protect the interest of their customers and the huge investments made by them, Bharti Airtel said in a statement.

On a consolidated basis, Bharti Airtel's net profit surged 115.1% to Rs 610.20 crore on 13.3% growth in net sales to Rs 21938.50 crore in Q3 December 2013 over Q3 December 2012.

Bharti Airtel is a leading global telecommunications company with operations in 20 countries across Asia and Africa. Headquartered in New Delhi, India, the company ranks amongst the top 4 mobile service providers globally in terms of subscribers. In India, the company's product offerings include 2G, 3G and 4G wireless services, mobile commerce, fixed line services, high speed DSL broadband, IPTV, DTH, enterprise services including national & international long distance services to carriers. In the rest of the geographies, it offers 2G, 3G wireless services and mobile commerce. Bharti Airtel had over 289 million customers across its operations at the end of January 2013.

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