Airtel confirms Augere acquisition amid rumours of Sri Lanka/ Bangladesh exit

Indian market  leader Bharti Airtel has confirmed its acquisition of Indian ISP Augere Wireless Broadband amid speculation that it may sell its units in Bangladesh and Sri Lanka.

Airtel’s 100% acquisition of Augere will give it control over the ISP’s 20MHz of 2.3GHz spectrum, allowing the operator to extend its 4G coverage. While Airtel has 4G spectrum in 14 of India’s 22 telecom circles, it has 2.3GHz spectrum in just 8 of these.

Owned by France Telecom, Augere acquired its 2.3GHz spectrum at auction in 2010, but has not launched 4G services and has been attempting to sell the licence. While Airtel has not revealed the price paid for Augere, the unit – which will now become an Airtel subsidiary – was last valued at around INR1.5 billion ($23.5 million).

Augere’s 2.3GHz spectrum accounted for the majority of this valuation. Airtel will use the spectrum to continue making inroads into the Indian 4G market. It has priced services aggressively, offering 4G for the same price as 3G services.

However, Airtel’s strong push 4G push in India may come at the expense of neighbouring markets Bangladesh and Sri Lanka. Airtel has reportedly appointed two bankers to oversee the divestments of both its tower and mobile businesses in the two countries.

The operator group’s subsidiaries in these countries both have a low share in their respective markets – Airtel Bangladesh has less than 7% despite being the fourth-placed operator in the market, while Airtel Sri Lanka is last-placed in the market with 9%. The firm’s South Asian revenues - including these two markets – fell 11% in Q2 to INR3.8 billion ($57.3 million).

The divestment could mark a trend across Airtel’s operations – it has been in exclusive talks with Orange regarding the sale of four African units. However, Airtel has denied that it will exit the continent.

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