Bharti Airtel to buy Tikona’s 4G business for Rs 1,600 crore

The acquisition is expected to massively increase Airtel’s pan-India presence, especially in the 2300 MHz band.

In an announcement on March 23, Bharti Airtel stated that it has consolidated an agreement with Tikona Digital Networks. As part of the agreement Bharti Airtel will take over the Tikona’s 4G business, along with the Broadband Wireless Access (BWA) spectrum and 350 sites, in five telecom circles for roughly Rs 1,600 crore. The agreement, however, is subject to requisite regulatory approvals.

In a press statement, Airtel said, “Tikona currently has 20 MHz spectrum in the 2,300 MHz band in Gujarat, UP (East), UP (West), Rajasthan and Himachal Pradesh circles. Airtel plans to rollout high speed 4G services on the newly acquired spectrum in the five circles immediately after the closure of the transaction.”

A regulatory filing with the Bombay Stock Exchange by the company indicated the estimated time of completion to be 60 days.

“Airtel’s continued focus on strengthening its 4G capabilities across multiple spectrum bands will be complemented with the BWA spectrum acquisition from Tikona,” said Gopal Vittal, MD and CEO (India and South Asia), Bharti Airtel. “We believe that combining our capacities in TD-LTE (term division-long term evolution) and FD-LTE (frequency division-long term evolution) will further bolster our network, and help us provide unmatched high-speed wireless broadband experience to our customers. We remain committed to our vision of leading India’s digital revolution by offering world-class and affordable telecom services through a robust spectrum portfolio spread across multiple bands.”

The statement added that Airtel’s total spectrum holding in these five circles will fall within the spectrum caps that the Indian government has prescribed, once the acquisition procedure is complete. As a result, it is expected that Airtel will now be able to fill the BWA spectrum gaps in the 2,300 MHz band in Rajasthan, UP (East) and UP (West), and thereby, secure a considerable pan-India presence in the band.

According to the statement, “The deal will significantly bolster Airtel’s spectrum position in Gujarat and Himachal Pradesh, taking its overall BWA spectrum holding to 30 MHz each in these circles. Post completion of the deal, Airtel will have 30 MHz in the 2300 MHz band in 13 circles giving it tremendous advantage to handle the surging data demand.”

The agreement states that Airtel would be directly undertaking the acquisition of the 4G business in Gujarat, UP (East and West), and Himachal Pradesh, while Airtel’s subsidiary, Bharti Hexacom Limited, would be in charge of the same for the Rajasthan circle.

Rishi Tejpal, Principal Research Analyst, Gartner, said that this was another step towards consolidation in the Indian telecom sector. He added that Airtel’s acquisition of Tikona’s 4G spectrum filled the company’s gap in the TDD-LTE band, mainly in UP East, UP West and Rajasthan circles. “With this acquisition, Airtel will have nationwide TDD-LTE spectrum,” he said.

Photograph: Steve Jurvetson/Flickr 

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