Bharti Airtel is selling spectrum from its 800MHz band in Andhra Pradesh, Delhi and Mumbai to Reliance Jio, the telcos said on Tuesday in announcements to the press (1, 2). Through this agreement — the first of its kind —, Airtel will receive Rs 1037.6 crores from Jio for the proposed transfer, which will be subject to regulatory approvals. In addition, Jio will assume future liabilities of Rs 459 crores relating to the spectrum.
“The trading agreement is in accordance with the Spectrum Trading Guidelines issued by the Department of Telecommunications,” Jio said in its press release. “With this trading of right to use spectrum, RJIL will have 2X15MHz of spectrum in the 800MHz band in Mumbai circle and 2X10MHz of spectrum in the 800MHz band in Andhra Pradesh and Delhi circles, thereby further consolidating its spectrum footprint in these circles.” Jio said it will use the spectrum to improve its network capacity; the telco is gearing up to do 5G trials, as and when the government holds auctions for the spectrum that will be used for that technology, among other regulatory hurdles.
The deal is an interesting way for Airtel to monetize airwaves that it has not been using much, and represents a rare instance of cooperation in an industry where the two remaining incumbent private telecom operators (Airtel and Vi) have often sparred publicly with Jio, whose entry led to their profits plummeting into losses for years, something they’re just now close to recovering from.
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