The stock of Bharti Airtel rallied 4 per cent in early trade on the back of news that it has decided to acquire the rights to use Aircel’s 4G spectrum for Rs 3,500 crore.
These relate to the rights to use 20 MHz 2300 band 4G TD spectrum in eight circles, namely, Tamil Nadu (including Chennai), Bihar, Jammu & Kashmir, West Bengal, Assam, North East, Andhra Pradesh and Orissa.
The company had informed the stock exchanges on April 8 about this deal.
Earlier in mid-March, the company announced that it had entered into a definitive agreement with Videocon Telecommunications, a subsidiary of Videocon Industries, to acquire rights to use spectrum in six regions for Rs 4,428 crore.
Reliance Jio services
With these acquisitions, Bharti will now be the second player after Reliance Jio to offer 4G services in all 22 circles.
RCom-MTS deal
In November 2015, another telecom player, Reliance Communications had announced that it would take over MTS, the Indian brand of Sistema’s mobile telephony venture operation, in an all stock deal. In December 2015, the company had also entered into talks with Aircel for the merger of wireless business.
Acquisition of spectrum by Bharti will bode well for the company. Increasing competition and the impending launch of services by Reliance Jio will make sustenance difficult for the bottom rung players.
COAI data
As per the Cellular Operators Association of India (COAI), Bharti Airtel held a dominant 32.35 per cent market share of the GSM subscriber base at the end of February 2015.
Bharti Airtel posted Rs 71,572 crore consolidated revenue for the nine months ended December 2015, with a year-on-year growth of 4 per cent.
During the same period, the company posted a 7 per cent growth in net income of Rs 4,193 crore. Capital expenditure saw significant increases, posting a 19 per cent year-on-year growth to Rs 14,534 crore.