Airtel to buy Tikona's 4G business for Rs1,600 crore

New Delhi: Bharti Airtel Ltd has agreed to buy Tikona Digital Networks Pvt. Ltd’s 4G business, including its broadband wireless access spectrum and 350 cellular sites in five telecom circles, the country’s largest telecom operator said on Thursday.

The deal size is “approximately Rs1,600 crore”, Bharti Airtel said in a regulatory filing

Mint had on 18 March first reported that the Bharti-Tikona transaction could be in the range of Rs800-1,000 crore. Tikona has some debt on its books, which Bharti Airtel will assume, so the overall deal value is close to Rs1,500-1,700 crore, the report said.

“Tikona currently has 20MHz spectrum in the 2300 MHz band in Gujarat, UP (East), UP (West), Rajasthan and Himachal Pradesh circles. Airtel plans to roll out high-speed 4G services on the newly acquired spectrum in the five circles immediately after the closure of the transaction,” Bharti Airtel said.

According to the agreement, the acquisition of the 4G business in Gujarat, Uttar Pradesh (East), Uttar Pradesh (West) and Himachal Pradesh will be undertaken by Airtel, while in the Rajasthan circle, it will be accomplished through its subsidiary, Bharti Hexacom Ltd, the statement said.

The deal would be another step in the process of consolidation set off by the aggressive pricing strategy of Mukesh Ambani’s Reliance Jio Infocomm Ltd, which entered the market in September.

Tikona bought 20 MHz of 4G airwaves in the 2300 MHz band in the 2010 auctions in Gujarat, Himachal Pradesh, UP (East), UP (West) and Rajasthan for Rs1,058 crore.

Bharti Airtel has limited 4G airwaves in the 2300 MHz band in circles where Tikona, a Mumbai-based network solutions provider, holds spectrum. For example, in UP (East), UP (West) and Rajasthan, it has no airwaves in the 2300 MHz band. In Gujarat and Himachal Pradesh, it has 10 MHz each.

“The proposed acquisition will enable Airtel to fill BWA spectrum gaps in the 2300 MHz band in Rajasthan, UP (East) and UP (West), thereby securing a pan-India footprint in the band. 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,” the statement said.

On completion of the transaction, Airtel will have 30 MHz in the 2300 MHz band in 13 circles, giving it a tremendous advantage in handling the surging data demand, it added.

The move comes less than a month after Airtel said it would acquire the Indian operations of Norway’s Telenor ASA to strengthen its presence in the 1800 MHz band. The transaction gave it access to 44 million customers (increasing its user base to 307 million), 43.4 MHz of spectrum in the 1800 MHz band and 20,000 base stations.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.