Airtel and Aircel negotiating 4G spectrum acquisition

Indian market leader Bharti Airtel is believed to be on the cusp of acquiring 4G spectrum from rival operator Aircel for roughly INR38 billion ($357 million).

If the deal goes through, it would see Bharti take over Aircel’s 2.3GHz spectrum in eight of India’s 22 telecom circles, giving Bharti 4G spectrum in a total of 18 regions – up from 15 currently. Expected to close by the end of Q1, the deal would allow Bharti Airtel to strengthen its 4G footprint to better compete with newcomer Reliance Jio’s imminent pan-Indian 4G launch.

Reliance Jio is the only Indian operator to hold 4G spectrum in all 22 of the country’s service areas. The newcomer had originally scheduled its pan-Indian launch for last year, but delayed it into this year while it made spectrum-sharing arrangements with Reliance Communications (RCom) and has now set early March as its 4G launch date.

The spectrum-sharing deal between RCom and Jio will see the latter acquiring 800MHz spectrum across nine regions, while the two operators will share bandwidth across 17 service areas as well as allowing roaming between their networks. The operators have already agreed to share tower and fibre assets across India.

Trading and sharing spectrum required the ‘liberalisation’ of RCom’s airwaves in the 800MHz band, for which it was required to pay the Department of Telecom INR53.84 billion ($805 million).

Airtel has attempted to capitalise on Jio’s delayed 4G launch by rolling out its own 4G services as quickly as possible. It has pledged its goal of extending its 4G offering to 296 urban areas from the current 45; however, as it stands the market leader has 700,000 4G connections – a fraction of its 238 million total.

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