• Airtel currently holds a mix of 1800Mhz and 2300Mhz airwaves and deploys 4G technology across 15 circles
Airtel deploys 4G technology acroos 15 of India’s 22 circles, and currently holds a mix of 1800MHz and 2300MHz airwaves.
While Airtel denied any discussions had taken place and Maxis-owned Aircel said it doesn’t comment on market speculation, three people familiar with the matter said the talks involved Airtel buying Aircel’s 4G bandwidth through the spectrum trading route.
“Some discussions have happened between very senior management of both the companies,” one of the people told ET. “But lots of things need to be sorted out like the valuations, but importantly, the deal may fall foul of the spectrum cap rules in two circles — Odisha and Andhra Pradesh.”
A second person said the thought process within Airtel is to “beef up as much spectrum as it can through spectrum trading and auctions”. He noted that after buying Qualcomm’s 4G airwaves in four circles, Airtel recently bought Augere Wireless, which owned 4G airwaves in Chhattisgarh-Madhya Pradesh circle.
The development comes as the country’s top GSM telcos Airtel, Vodafone India and Idea Cellular brace for a bitter battle for higher-paying data subscribers with Jio, which is set to launch 4G services in December.
Jio, on its part, is set to ink pan-India spectrum sharing and trading deals with Reliance Communications in a bid to bolster its own bandwidth holdings on which it can offer the highspeed broadband services. Given the plateauing of growth in voice revenue and spurt in growth of mobile data, success of telecom operators in 3G and 4G space will become the decisive factor in profitability in near future.
Airtel currently holds a mix of 1800Mhz and 2300Mhz airwaves on which it deploys 4G technology across 15 of India’s 22 circles. Aircel’s airwaves in eight circles would give the Sunil Mittal-headed telco a 4G footprint across 18 circles, nearly on a par with Mukesh Ambani-owned Jio, the only operator to hold 4G airwaves across all 22 circles.
4G fight will bleed Aircel
Moreover, Aircel doesn’t want to get caught in the 4G fight between heavyweight GSM telcos such as Airtel, Vodafone India and Idea Cellular and a Jio-Reliance Communications combine which can leave it bleeding even more, a third person said.
“Aircel is keen to offload airwaves, especially 2300Mhz, and there is only one buyer in the market at this time (Airtel), unlike airwaves in 1800Mhz and 2100Mhz band which could see interest from other bigger players,” he added.
Another person in the know added that going by discussions so far, the airwaves could be sold at a discount of 5-7% to the last discovered price of spectrum in the 2010 auctions, which is when both Airtel and Aircel bought their 4G airwaves.
Aircel had paid Rs 3,438 crore to win 4G airwaves in the 2300Mhz band in the 2010 spectrum auctions in eight of the 22 circles. However, five years later, the company has launched its services in six circles of Tamil Nadu, Andhra Pradesh, Bihar, Odisha, Assam and Jammu & Kashmir, but only for enterprise customers. It is yet to launch any services in the North East and West Bengal. It recently announced expansion of its network by adding 13,000 2G, 3G and 4G sites across the country by December.