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Rivals Airtel & Jio ink 1,500cr spectrum trading deal

NEW DELHI: Often sparring telecom companies Airtel and Reliance Jio came together for a near Rs 1,500-crore spectrum trading deal as the mobile operators took steps to rationalise and monetise their spectrum holdings just weeks after the conclusion of a mega airwave sale by the government, reports Pankaj Doval.
Jio signed an agreement with Airtel to acquire some of the latter’s spectrum in the 800 MHz band in Andhra Pradesh, Delhi and Mumbai circles at an aggregate deal value of about Rs 1,497 crore. As part of the agreement, Airtel would receive Rs 1,038 crore from Jio for the proposed transfer. In addition, Jio will also assume the future liabilities of Rs 459 crore relating to the spectrum.
Notwithstanding the deal, Jio and Airtel have often been at loggerheads with each other right since Mukesh Ambani re-entered the telecom business in September, 2016.
Airtel, founded by Sunil Mittal, had accused Jio of engaging in predatory prices to capture the telecom market, while also alleging that the new entrant had disrupted the financial model of the telecom industry by making voice-calling free.
Jio, on the other hand, had accused Airtel and other rival Vodafone Idea of deliberately not providing enough inter-connection points at the time of the launch of its services, which had finally seen regulator Trai slap a Rs 3,050-crore penalty on the rivals of Ambani’s venture.
Commenting on the current deal, Gopal Vittal, MD and CEO (India and South Asia), of Airtel, said, “The sale of the 800 MHz blocks in these three circles has enabled us to unlock value from the spectrum that was unutilised. This is aligned to our overall network strategy.”
Jio gets a “right to use” on Airtel’s 800 MHz spectrum in Andhra Pradesh (3.75 MHz), Delhi (1.25 MHz) and Mumbai (2.50 MHz).
“With this trading of right to use spectrum, Jio will have 2X15MHz of spectrum in the 800MHz band in Mumbai circle and 2X10MHz of spectrum in the 800MHz band in Andhra Pradesh and Delhi circles, thereby further consolidating its spectrum footprint in these circles. With the enhanced spectrum footprint, especially contiguous spectrum, and superior infrastructure deployed, Jio has further increased its network capacity,” Jio said. The companies said that the transaction is subject to requisite regulatory and statutory approvals.

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