Bharti Airtel Will Acquire Tikona’s 4G Business To Strengthen Pan-India Presence
The deal will cost Bharti Airtel around Rs 1,600 crore.
India's largest telecom operator Bharti Airtel Ltd. will acquire domestic broadband service provider Tikona Digital Networks’ 4G business to bolster its spectrum footprint in the country.
Airtel will pay Tikona approximately Rs 1,600 crore to buy 100 megahertz (MHz) spectrum in five circles in the 2,300 MHz band, the company said in a stock exchange filing. The deal will be funded through a mixture of cash and debt.
Airtel has limited 4G waves in these five circles. For example, in UP (East), UP (West) and Rajasthan, it has no airwaves in the 2,300 MHz band. In Gujarat and Himachal Pradesh, it has 10 MHz each.
“The deal will give Airtel the spectrum to strengthen its high-speed wireless broadband services,” Gopal Vittal, Managing Director and Chief Executive Officer of Bharti Airtel (India and South Asia) said in the statement.
Tikona had acquired the spectrum holding seven years ago in a third generation (3G) and wireless broadband spectrum auction. The spectrum is liberalised with a validity till 2030.
All About Consolidation
Bharti Airtel has already made two acquisitions so far this year. Last month, it acquired Telenor India Communications’ operations in seven circles adding 43 MHz in the 1,800 MHz band.
The only way to ensure growth is to add more spectrum, Rishi Tejpal, an analyst at research firm Gartner said in an emailed statement.
Future expansion and growth will depend on the quantum of spectrum held and the quality of services offered. Such acquisitions help operators to address the above highlighted issues.Rishi Tejpal, Analyst, Gartner
India’s telecom sector has been in consolidation mode as incumbent telecom operarors look to shore up their infrastructure to provide more data services to customers. The entry of Reliance Jio Infocomm’s Ltd. in September last year, has only made it tougher for existing players.
Last week, Idea Cellular Ltd. agreed to merge Vodafone Plc’s Indian unit with itself to create the country’s largest mobile services operator.
Anil Ambani-led Reliance Communications Ltd. hived off its wireless division and merged it with Aircel Ltd. in a new combined entity, in September last year.