Telecommunications company Bharti Airtel said it would buy internet services provider Tikona Digital Networks’ 4G business in a deal worth 16 billion rupees.
Telecom operator Bharti Airtel said it would buy Tikona Digital Networks’ 4G business in a deal worth 16 billion rupees which include Tikona’s Broadband Wireless Access spectrum and 350 sites in five telecom circles.
Tikona has 20 MHz spectrum in the 2300 MHz band in Gujarat, UP (East), UP (West), Rajasthan and Himachal Pradesh circles.
With this deal, Airtel will have spectrum in 2300 MHz band across all circles. The company plans to roll out high-speed 4G services on the newly acquired spectrum in the five circles immediately after the closure of the transaction, according to a company statement.
In the recent days, the mergers and acquisitions have gathered great step in the telecommunication industry because of Reliance Jio.
Reliance, with an investment of $25 billion offering free voice and data service for six months, has interrupted the industry’s pricing structure.
Director General of the Cellular Operators Association of India, Rajan Mathews, said the current tariff war in the market may not be maintainable for long period.
He said that in contrast to 13 telecom operators a few years ago, the Indian mobile telecom market is down to “four or five operators.”
In the last month, Bharti Airtel announced the acquisition of the local unit of Norway’s Telenor, but it didn’t reveal the deal size.
Gopal Vittal, MD & CEO (India & South Asia) of Bharti Airtel, said, “Airtel continued focus on strengthening its 4G capabilities across multiple spectrum bands will be complemented with the BWA spectrum purchase from Tikona.”
Principal research analyst at Gartner, Rishi Tejpal, said that the acquisition with Tikona filled the gap that it had in the TDD-LTE band mainly in UP East, UP West and Rajasthan circles. “By this deal, Airtel will have nationwide TDD-LTE spectrum.”
He stated that this additional spectrum will help Bharti Airtel to be ready for future surging data demands on 4G. In addition, this will also help the telecom operator to enhance the quality of service with additional spectrum, he added.
For offering 4G LTE services, TDD-LTE and FDD LTE are two different standards.
As per the deal announced on Thursday, the acquisition of the 4G business in Himachal Pradesh, UP (East), UP (West) and Gujarat will be undertaken by Airtel, while in the Rajasthan circle, it will be accomplished through Airtel’s subordinate Bharti Hexacom Limited.
The deal will fill the BWA spectrum gaps in the 2300 MHz band in UP (East), UP (West) and Rajasthan. The acquisition will significantly strengthen Airtel’s spectrum position in Gujarat and Himachal Pradesh, taking its overall BWA spectrum holding to 30 MHz each in these circles, according to the company.