Indian Telecom Firms Conclude Spectrum Trading Agreement
NEW DELHI — Indian telecom firm Bharti Airtel on Aug. 13 announced the closure of an agreement to transfer the ‘right to use’ its 800-megahertz spectrum in three circles to Reliance Jio Infocomm.
Bharti Airtel has received INR 1,004.8 crores ($135.3 million) [net of tax] from Reliance Jio Infocomm for the proposed transfer, as per a statement.
In addition, Reliance Jio Infocomm will assume future liabilities of INR 469.3 crore ($63.1 million) relating to the spectrum.
Headquartered in India, Airtel is a global telecommunications company operating in 18 countries across South Asia and Africa. The company ranks amongst the top three mobile operators globally, and its mobile network covers a population of over two billion people.
In April, Reliance Jio Infocomm entered into a definitive agreement with Bharti Airtel to acquire the ‘right to use’ spectrum in the 800-megahertz band in three circles through spectrum trading.
“The sale of the 800-megahertz blocks in these three circles has enabled us to unlock value from the spectrum that was unutilized,” Gopal Vittal, managing director and chief executive officer (India and South Asia), Bharti Airtel, said in April.
“This is aligned to our overall network strategy.”
“The aggregate value for the right to use this spectrum is INR 1,497 crores ($201.58 million), inclusive of the present value of associated deferred payment liability of INR 459 crores ($61.8 million), subject to any transaction related adjustments,” a Reliance Jio Infocomm statement said at the time of the agreement.
The agreement was following spectrum trading guidelines issued by the Indian Department of Telecommunications.
At the time, the firm had said that with trading of ‘right to use’ spectrum, Reliance Jio Infocomm would have 2*15-megahertz of spectrum in the 800-megahertz band in Mumbai circle, and 2*10-megahertz of spectrum in the 800-megahertz band in Andhra Pradesh and Delhi circles, thereby further consolidating its spectrum footprint in these circles.
India’s richest man, Mukesh Ambani, entered the telecom arena with Reliance Jio Infocomm in September 2016 after testing its 4G services with a limited number of group firm employees since December 2015.
After the official launch, Reliance Jio Infocomm offered the cheapest rates for 4G services, which forced Bharti Airtel and Vodafone to reduce their prices. Vodafone India had to announce a merger with Idea Cellular (owned by the Aditya Birla Group). The merger was approved in 2018, and the entity has since been called Vodafone Idea.
Reliance Jio Infocomm’s spectrum sharing pact with another telco run by Mukesh Ambani’s younger brother Anil Ambani, Reliance Communications, expired in July 2021 (Anil Ambani’s telecom firm has since shut down).
As a result, this year, Reliance Jio Infocomm bid the highest in the 800-megahertz band to renew its license and keep its 4G services active in 18 circles.
(With inputs from ANI)
Edited by Amrita Das and Praveen Pramod Tewari