We reported earlier that Airtel is moving ahead and is very close to buying Tikona’s 4G spectrum. With this 4G spectrum under its belt, Bharti Airtel will be able to provide data services to customers at an increased capacity. Confirming the said report today, Bharti Airtel has now entered into a definitive agreement with Tikona Digital to acquire its 4G business in four circles of Gujarat, UP (East), UP (West) and Himachal Pradesh.

Besides strengthening its 4G range, the agreement covers Tikona’s wireless broadband business in five circles for Airtel. The agreement scuttle within the telecom sector comes on the heels of the recent merger talks between Idea and Vodafone. Earlier this week, Idea Cellular announced that its board of directors has approved the merger of Vodafone India and its fully-owned subsidiary Vodafone Mobile Services Limited. With the merger, the new telecom entity has become the largest telecom network in the country while Airtel has been pushed to the second spot.

For Airtel’s subsidiary Bharti Hexacom Limited, it will be responsible for supervising company’s wireless business in Rajasthan post acquisition of Tikona. As per a regulatory filing, Bharti Airtel shall acquire the 4G business of Tikona for approximately Rs 1,600 crore, as speculated by us, the past week.

Reporting the news to ET, Gopal Vittal, MD & CEO (India & South Asia), Bharti Airtel said,

We believe that combining our capacities in TD-LTE and FD-LTE will further bolster our network, and help us provide unmatched high-speed wireless broadband experience to our customers.

As soon the proceedings conclude, Airtel will dispense its high-speed 4G services on the newly acquired spectrum in the five circles immediately. Following Jio, Airtel will jump to the second spot as a telecom company having a pan-India presence in 2300 Mhz band. Speaking figuratively, Airtel will have 30 MHz in the 2300 MHz band in 13 circles. Adding to it, Vittal said,

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 consolidation drive suggests that the industry’s return on invested capital levels are unsustainably low and spectrum ownership and ability to spend will be key to survival in a high data volume environment. Our understanding is that Bharti’s balance sheet and solid spectrum portfolio puts the company in a position to benefit, especially when Jio starts charging for its services from 1st April.

The merger will certainly follow TRAI’s norms which state — an operator can hold a maximum of 50% revenue share, 50% subscriber share and 50% spectrum share in each band (excluding 800 MHz) in each circle.The company will only operate within the prescribed spectrum caps by the government.

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