Bharti Airtel to acquire Videocon Telecom spectrum for Rs 4428cr
Airtel will use the 1,800 MHz band spectrum for services in Bihar, Haryana, Madhya Pradesh, Uttar Pradesh East and West as well as Gujarat regions
India’s largest telecom operator (by subcriber base) Bharti Airtel has acquired Videocon Telecom for Rs 4,428 crore.
Bharti Airtel will get rights to use 2X5 MHZ in 1800 band allocated to Videocon by the Government of India, Ministry of Communication & IT, Department of Telecommunication (DoT) on April 5, 2013.
On Wednesday, Idea Cellular had terminated its spectrum deal with Videocon under which it was supposed to buy two circles – Gujarat and Uttar Pradesh (West) – for Rs 3,310 crore.
Post the deal, Bharti’s 4G coverage will go upto 19 circles from the current 15.
Nitin Soni of Fitch Ratings says that the investment will bring-in reasonable returns for Bharti. While the ratings remain unchanged, credit quality of Bharti is expected to improve over a period of time, he adds.
With the company trying to expand its 4G reach, one might see another deal to acquire more assets, Soni adds.
Naveen Kulkarni of PhilipCapital says that considering what Idea was paying for two circles, Bharti will be paying for all six circles. The deal certainly does not look bad.
Kulkarni further says that Bharti, which already has spectrum, needs more in certain circles. “More spectrums always help,” he says. Videocon, as well, is making good money on the deal, Kulkjarni adds.
At 11:17 hours IST, the scrip of Bharti Airtel was quoting at Rs 348.20, up Rs 8.55, or 2.52 percent while Videocon Industries rallied 14.7 percent to Rs 125.8 on the Bombay Stock Exchange.
Reliance Jio Infocomm Ltd and Anil Ambani’s Reliance Communications Ltd have also signed a spectrum sharing and trading pact in January across 17 wireless areas in the 800 megahertz band.
Source: Money Control
Bharti Airtel to acquire Videocon telecom