Air­tel gets more spec­trum power to fight Re­liance Jio

The Hindu Business Line - - IT & TELECOM -

The deal with Tata Te­le­ser­vices is prob­a­bly the sweetest deal for Bharti Air­tel, which has made over five ac­qui­si­tions in the last few years. Not only does Air­tel get ac­cess to 40 mil­lion sub­scribers, it also gets ac­cess to valu­able spec­trum in 3G and 4G bands for prac­ti­cally zero cost.

Bharti com­bined with Tata’s air­waves will have con­trol of 29 per cent of the to­tal spec­trum avail­able to tele­com ser­vice providers. Voda­fone and Idea com­bined will have ac­cess to 28 per cent of the air­waves while Re­liance Jio has about 19 per cent of all spec­trum.

In terms of sub­scriber base, Air­tel is al­ready num­ber one. But if Voda­fone and Idea Cel­lu­lar merger goes through then Air­tel will drop down to the sec­ond spot.

“This is a good deal for Air­tel and en­ables them to po­ten­tially be­come very strong and dom­i­nant player in data ser­vices mar­ket,” said GV Giri of IIFL.

The Bharti Air­tel-Tata Tele com­bined en­tity would also have a share of around 40 per cent in the to­tal tele­com rev­enues, which will be just be­hind the pro­jected 44 per cent for the Idea-Voda­fone com­bine.

The big­gest gain

In the ear­lier deals, Air­tel has had to take the spec­trum pay­ment li­a­bil­i­ties. But in this case Air­tel will only pay about ₹1,500 crore of the ₹9,500 crore li­a­bil­i­ties which Tata Tele has. The bal­ance will be paid by Tata Tele. Air­tel is also not tak­ing Tata Tele’s debt. But Air­tel may have to cough up $1.2 bil­lion to the gov­ern­ment if it wants to lib­er­alise part of the spec­trum held by Tata Tele.

The big­gest gain for Air­tel would be the ac­cess to 800 MHz band, which will be use­ful for 4G ser­vices. As of now, only Re­liance Jio has ma­jor al­lo­ca­tions in this fre­quency band. Air­tel will have to take on board large part of Tata Tele’s 5,000 em­ploy­ees. This is good for the em­ploy­ees of Tata Tele as they were fear­ing a shut down of op­er­a­tions in which case they would have lost their jobs.

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