Bharti Airtel today announced that it had entered into a definitive agreement with Videocon to acquire the rights to use 1800 MHz spectrum in six circles for Rs 4,428 crore.
The development comes a day after Idea Cellular had called off its agreement with Videocon. Idea had agreed to pay Rs 3,300 crore for spectrum in two circles.
The six circles where Bharti gets access to 1800 MHz spectrum are Bihar, Haryana, Madhya Pradesh, UP (East), UP (West) and Gujarat (Transaction). The spectrum is valid up to December 18, 2032.
Bharti needed the additional spectrum in Haryana and Bihar circles. The acquisition will give Bharti the ability to offer high-quality data services. The company has strongest spectrum holdings in the industry today other than Reliance Jio. It has 18% spectrum of the total airwaves available in the country.
In the sub-1 gigahertz band, it holds 15% of the total, while it holds 17% in the 1,800 MHz band. In the 2100/2300 MHz band, Bharti holds 21%, but these bands are not as efficient for data propagation as the lower bands are. Vodafone launched its 4G services on 1800 MHz band in several circles.
Late last year, Idea Cellular stunned the industry by agreeing to pay Rs 3,310 crore to Videocon Telecommunications for the right to use spectrum in the 1800 MHz band in Gujarat and Uttar Pradesh West (2x5 MHz contiguous blocks of 1800 MHz in each service area). What came as a surprise to the industry was the price that Idea has paid for this spectrum, which was three times the price that Videocon paid in November 2012 (Rs 1,330 crore).
Idea Cellular now holds 1800 MHz 4G spectrum in 10 telecom circles which cover 50% of telecom market, but over 60% of Idea’s gross revenue.