business

Updated: Mar 17, 2016 23:26 IST

India’s largest telecom operator by subcriber base, Bharti Airtel, said on Thursday that it has acquired Videocon Telecom for Rs 4,428 crore.

With this, Bharti Airtel will get the rights to use 2X5 MHz of spectrum in the 1800 band allocated to Videocon by the government on April 5, 2013. On March 16, Idea Cellular had terminated its spectrum deal with Videocon under which it was supposed to buy two circles - Gujarat and Uttar Pradesh (West) - for Rs 3,310 crore.

After Thursday’s deal, Bharti’s 4G coverage is likely to go up to 19 circles from the current 15.

“Bharti Airtel has on March 16, 2016 entered into a definitive agreement with Videocon Telecommunications (VTL) to acquire, at an aggregate consideration of Rs 4,428 crore, rights to use 2 x 5 MHz spectrum in the 1800 MHz Band allotted to VTL by the government,” Bharti Airtel said in a statement.

The aforesaid spectrum is valid upto December 18, 2032, it added.

The closing of the transaction is subject to satisfaction of the standard conditions (including conditions stated in the spectrum trading guidelines), as are normal to such transactions.

India’s largest telecom operator by subscriber base, Bharti Airtel, has agreed to buy Videocon Telecommunications Ltd’s spectrum for Rs 4,428 crore, the second such deal after the government allowed spectrum trading in October last year.

With smartphone sales booming, telcos are ramping up infrastructure spending to expand 3G and 4G mobile broadband services across the country, especially in the wake of the entry of Mukesh Ambani-led Reliance Jio Infocomm. India has over 1 billion mobile phone subscribers.

“Bharti Airtel has entered into a definitive agreement with Videocon Telecommunications Ltd (VTL) to acquire, at an aggregate consideration of Rs 4,428 crore, rights to use 2x5 megahertz (MHz) spectrum in the 1,800 MHz band for six circles,” the company said in a BSE filing.

The six circles are Bihar, Haryana, Madhya Pradesh, UP (East), UP (West) and Gujarat, and the spectrum is valid up to December 18, 2032.

After the deal, Bharti’s 4G coverage is likely to go up to 19 circles from the current 15.

The deal is subject to the satisfaction of standard conditions.

On March 16, Aditya Birla Group firm Idea Cellular announced that it had terminated the deal with Videocon to acquire the latter’s spectrum in Gujarat and Western Uttar Pradesh, for Rs 3,310 crore.

The deal is the second since the Department of Telecommunications (DoT) issued guidelines for spectrum trading last year. In November 2015, Anil Ambani-led Reliance Communications announced the acquisition of Sistema Shyam TeleServices Ltd’s spectrum in nine circles.

The news of the deal sent Videocon Industries’ shares surging 17% on the Bombay Stock Exchange. Airtel’s shares rose 3.63%. Both, however, gave up most of the gains and ended marginally higher by 1%.

“The deal will help Airtel have a better flexibility of spectrum planning across all three technologies,” said Amresh Nandan, director, Gartner Research.