Idea Cellular will acquire spectrum held by Videocon Telecommunications in Gujarat and Uttar Pradesh (west) for ₹3,310 crore.
This is the first deal after the new spectrum trading policy was announced by the Centre a month ago.
Idea Cellular has the right to use the spectrum till December 2032, the company said in a statement. It is, however, paying almost 2.5 times of what Videocon paid for the spectrum. Videocon had paid a total of ₹1,329 crore in these two circles — Gujarat (₹900 crore) and UP-West (₹429 crore) — in the November 2012 auctions.
“The value of spectrum in 2015 cannot be compared with that of 2012,” said Himanshu Kapania, Managing Director, Idea Cellular. In 2012, the spectrum was essentially for 2G voice telephony services but now Idea will use it for offering 4G services.
“In these two circles, while we had 2G and 3G spectrum, we were not able to acquire 4G spectrum during the two auctions of 2014 and 2015. Following DoT’s approval, we will now have 2G, 3G and 4G spectrum across all our eight leadership circles in the country,” Kapania said.
This agreement will help Idea expand its 4G footprint across 12 service areas covering more than 75 per cent of its current revenue and over 72 per cent of existing 170 million subscribers.
For Videocon, the deal allows them to exit partially. The operator’s 2 million subscribers in these two circles will now get the option of porting to another operator’s network.