Videocon selling spectrum to Airtel; scraps Idea deal

Indian market leader Bharti Airtel is spending INR44.28 billion ($659 million) to obtain spectrum in six regions from the smaller player Videocon Telecom.

Under the agreement, which is set to last until December 2032, Airtel will obtain 10MHz of 1.8GHz spectrum across Bihar, Gujarat, Haryana, Madhya Pradesh, Uttar Pradesh (East) and Uttar Pradesh (West).

The acquisition is aimed at bolstering Airtel’s total spectrum as it extends its 4G network to compete with Reliance Jio’s upcoming pan-India 4G launch. The deal is subject to regulatory approval.

The Airtel agreement was unveiled one day after Videocon and Idea Cellular scrapped a previous spectrum trading deal that saw the third-placed operator acquiring spectrum from Videocon in the same band and in two of the same regions (Gujarat and Uttar Pradesh West). The agreed price for this spectrum was INR33.1 billion.

Videocon is a comparatively tiny player in India, with less than 1% market share. It has been looking to sell off spectrum in order to generate funds, and to this end has discussed deals with several operators, including Airtel, Telenor and Vodafone India.

Airtel and Videocon’s arrangement decreases the likelihood of Airtel entering into a previously reported spectrum-sharing deal with state operator BSNL. The agreement was set to cover four regions – Assam, Bihar, Rajasthan and Uttar Pradesh (West) –but since these service areas overlap with the just-announced Videocon deal, Airtel is unlikely to pursue this arrangement with BSNL as it currently stands. 

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