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Update: Airtel completes acquisition of Aircel’s 4G spectrum in 8 circles

Airtel 4G

Update (November 23rd, 2016): Bharti Airtel has completed acquisition of Aircel’s 20MHz of spectrum under the  2300MHz band in all 8 circles, with necessary approvals from the Department of Telecommunication, the company informed in a filing with the stock exchanges.

April 11, 2016: India’s largest telecom operator, Airtel, is continuing its aggressive expansion in 4G and has bought 20 Mhz of the 2,300 band spectrum from Aircel for Rs 3,500 crore, the company said in a filing with the stock exchanges. The deal will allow Airtel to offer 4G services in the eight circles of Tamil Nadu, Bihar, Jammu and Kashmir, West Bengal, Assam, the North East, Andhra Pradesh and Odisha.

“With the above acquisition, Bharti Airtel will become a pan India 4G operator,” the company added in its statement.

The deal was completed by Bharti Airtel Limited and its subsidiary Bharti Heaxacom Limited.

Earlier in March, Airtel had bought Videocon’s 1,800 Mhz spectrum in six circles for Rs 4,428 crore. Videocon Telecom had broke off its earlier deal with Idea Cellular for the same. In November 2015, Idea Cellular had entered into an agreement to acquire the rights to use spectrum currently with Videocon Telecom in the 1800 MHz band in two key circles – Maharashtra and Uttar Pradesh (West) – for Rs 3310 crore.

Airtel is going head-to-head with Mukesh Ambani’s Reliance Jio. Airtel now offers 4G services in 19 0f the 22 telecom circles. Reliance Jio has a unified pan India licence which allows it to operate 4G services in the country. Jio can operate in all 22 circles under the license.

700 Mhz spectrum is too expensive

Airtel had told analysts that the proposed 700 Mhz spectrum auction was too expensive. “We believe that the price that has been set or proposed for 700 MHz just makes it very, very expensive for us to buy any of that spectrum, so we believe we cannot afford to buy that spectrum at that price,” Gopal Vittal, Airtel India CEO said in February.

Earlier in January, the Telecom Regulatory Authority of India (TRAI) had recommended a reserve price of Rs 11,485 crore per MHz for pan India airwaves for the next round of auctions. This includes the base spectrum pricing for seven bands, including the 700 MHz spectrum which is being offered for the first time and supposedly offers high quality mobile broadband and 4G. The 700 MHz band spectrum could independently cost Rs 4 lakh crore at the same price.

Reliance Communications and Aircel merger

Earlier this month, Reliance Communications which had earlier entered into a non-binding but exclusive discussion with Aircel to merge its wireless business with the latter, extended the exclusivity period by 60 days until May 22, 2016.

In January, Reliance Communications (RCOM) and Reliance Jio (RJio) had entered into a strategic partnership to share spectrum to provide LTE services. RCOM and RJio had signed agreements in spectrum allotment in 800 MHz band across 9 Circles from RCOM to Reliance Jio. The companies also agreed to share spectrum in 800 MHz band across 17 Circles.

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