Airtel shifts 800MHz spectrum to Jio and sets up JV with Dixon

Airtel shifts 800MHz spectrum to Jio and sets up JV with Dixon

Bharti Airtel has agreed to sell its 800MHz spectrum for three of India’s telecom circles to larger rival Reliance Jio Infocomm.

As reported by TeleGeography, the deal will see Jio acquire the ‘Right to Use’ Airtel’s 800MHz spectrum in Andhra Pradesh (3.75MHz), Delhi (1.25MHz) and Mumbai (2.5MHz) for INR10.38 billion (USD141.2 million). Jio will also assume future liabilities of INR4.59 billion. The deal is awaiting regulatory clearance.

Airtel CEO Gopal Vittal said: “The sale of the 800MHz blocks in these three circles has enabled us to unlock value from spectrum that was unutilised. This is aligned to our overall network strategy.”

Business outlet The Economic Times quoted an unnamed Airtel official as saying that the operator’s spectrum holding in these circles was fragmented and under 5MHz, and arguing that it “didn’t justify the CAPEX.”

Separately, Airtel’s parent firm Bharti Enterprises has signed an agreement with Indian electronics manufacturer Dixon Technologies that will establish a new joint venture to create telecoms equipment, including IoT devices, modems, routers and set top boxes. Bharti Enterprises will take a minority stake of 26% in the venture, with Dixon holding the majority 74% stake.

Dixon CFO Saurabh Gupta said: “We see [Bharti] as our ideal long-term strategic partner…we intend to leverage each other’s strengths to manufacture telecom and networking products.”

Once the venture has been set up, it will file for the Indian government’s Production Linked Incentive (PLI) Scheme, which provides financial benefits for firms that manufacture telecoms equipment domestically.