Reliance Jio announced on Tuesday that it has signed an agreement with Bharti Airtel for acquisition of right to use spectrum in the 800 MHz band in Andhra Pradesh, Delhi and Mumbai circles through spectrum trading.
After the transfer, Jio's spectrum footprint will be enhanced in 800 Mhz band to 2x15 Mhz in mumbai circle and 2x10 Mhz in Andhra Pradesh and Delhi circles.
Airtel's 800 MHz spectrum in Andhra Pradesh (3.75 MHz), Delhi (1.25 MHz) and Mumbai (2.50 MHz) will be transferred to Jio.
"The trading agreement is in accordance with the Spectrum Trading Guidelines issued by the Department of Telecommunications," Reliance Industries said in a filing.
"The aggregate value for the right to use this spectrum is Rs 1,497 crore, inclusive of present value of associated deferred payment liablity of Rs 459 crore, subject to any transaction related adjustments," it said.
"Through this agreement, we will receive a consideration of Rs 1037.6 crore from Jio for the proposed transfer. In addition, Jio will assume future liabilities of Rs 459 crores relating to the spectrum," Airtel said in a seperate filing.
Gopal Vittal, MD and CEO of Airtel said that the sale of the 800 MHz blocks has enabled the company to unlock value from spectrum that was unutilised.
Jio said that with the enhanced spectrum footprint, especially the contiguous one, and superior infrastructure deployed, it has further increased its network capacity.
The transaction is subject to the requisite regulatory and statutory approvals.