Indian market leader Bharti Airtel has signed an agreement to acquire spectrum from local operator Aircel across six of the operator’s eight regions.
Approval for the acquisition was granted under a wider INR35 billion ($525 million) trading agreement signed in April. The deal will help Airtel compete more effectively as newcomer Reliance Jio prepares to launch its pan-Indian 4G network.
Sale of the 2300MHz spectrum has been cleared for Assam, Bihar, Jammu, Kashmir, North East, Tamil Nadhu and West Bengal. Deals have not yet been cleared for Andhra Pradesh and Orissa; the latter has been problematic as Airtel’s spectrum holding following an acquisition would exceed the spectrum cap for the region. For the deal to go ahead Airtel would need to relinquish 1.2MHz of spectrum in Orissa.
Airtel will be able to access Aircel’s 4G spectrum until 2030. The deal allows it to offer nationwide LTE coverage that will enable it to compete with Reliance Jio. While the newcomer has delayed the commercial launch of its 4G network several times, it is expected to begin offering services this year.
The agreement with Bharti will allow Aircel to reduce its debt ahead of its merger with Reliance Communications, which is currently underway and reportedly due to close this month.