In yet another consolidation move in the telecom industry, Bharti Airtel — India’s largest telecom operator announced that it will acquire Telenor India assets. The acquisition will include transfer of all of Telenor India’s assets and customers, further augmenting Airtel’s overall customer base and network.
Telenor India currently has operations in seven circles, which include Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam. The deal is said to immensely benefit Airtel due to high population concentration in these circles.
The deal will also enable Airtel to further bolster its strong spectrum footprint in these seven circles, with the addition of 43.4 MHz spectrum in the 1800 MHz band.
This move comes at a time when new entrant Reliance Jio has announced that it has acquired 100 million users and the market is awaiting response on a potential merger of Vodafone and Idea.
Gopal Vittal, Managing Director and Chief Executive (India and South Asia), Bharti Airtel, said in the filing:
The agreement underlines our commitment to lead India’s digital revolution by offering world class and affordable telecom services through a robust spectrum portfolio spread across multiple bands. On completion, the acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position in several key circles.
Telenor Group CEO Sigve Brekke said,
We believe today’s agreement is in the best interests of our customers, employees and Telenor Group. Finding a long-term solution to our India business has been a priority for us, and we are pleased with our agreement with Airtel. The decision to exit India has not been taken lightly. After thorough consideration, it is our view that significant investments needed to secure Telenor India’s future business on a standalone basis will not give an acceptable level of return.
In terms of subscribers, Airtel gets another 52.5 million subscribers from the user base of Telenor. Airtel currently has 269.40 million subscribers across India. Signalling its intention to exit India, Telenor had marked down the value of its local business by Rs. 5,000 crore in 2016, and it did not participate in the October spectrum auctions.
In addition, Vodafone earlier said that it is in exploratory discussions with Aditya Birla Group’s telecom arm Idea Cellular for a merger. If the merger talks go through, the combined entity stands to become India’s largest telecom company with revenues of over Rs. 80,000 crore. The combined entity would have 43 percent revenue market share and have a 40 percent active subscriber market share.
