Vodafone India considering Telenor acquisition

Vodafone India is mulling an acquisition of Telenor’s Indian operations in an attempt to increase its spectrum holding.

As the country’s second largest operator, Vodafone is looking to compete more effectively with market leader Bharti Airtel and newcomer Reliance Jio, which is lining up the launch of a pan-Indian LTE network. Telenor’s Indian unit has 54 million connections across six telecom circles.

Vodafone, which has a market share of 19%, is reportedly the forerunner to acquire Telenor’s operation; it could acquire the unit fully or form a spectrum trading/sharing agreement. Vodafone’s primary interest in Telenor is the latter’s 1.8GHz spectrum, which can be used to offer 4G services. Telenor, which has a market share of 5%, holds spectrum in this band across seven telecom circles; the holding is valued at around $1 billion. Vodafone meanwhile only holds 4G-capable spectrum in five telecom circles.

Vodafone will have the opportunity to acquire further spectrum in the country’s upcoming auctions in September, which is expected to be the largest ever in India. Airwaves on the block will include the highly desirable 700MHz frequency, along with spectrum in the 800, 900, 1800, 2100, 2300 and 2500MHz bands.

Along with Jio, Bharti also holds 4G spectrum across India, while third-placed Idea Cellular has 4G-capable spectrum in ten regions. The market leader has made efforts to bolster its 4G reach by signing spectrum deals over the past year, and currently offers 4G services to around 400 towns and cities over 15 regions.

While Jio has begun offering LTE services to the public, it has not fully launched its network. Indeed, the official launch of its 4G network has been pushed back several times over the past six months, although certain employees of its parent firm Reliance Industries have been able to use the network since the end of last year.