Billionaire Mittal Pays $663 Million for Videocon Spectrumby
Videocon shares jump by the most since November on agreement
Deal shows accelerating consolidation in fragmented industry
Bharti Airtel Ltd., India’s largest wireless operator by subscribers, said it will buy airwaves from Videocon Telecommunications Ltd. for six regions for 44.3 billion rupees ($663 million) to increase its network coverage.
The carrier, controlled by billionaire Chairman Sunil Mittal, will use the 1,800 megahertz band spectrum for services in Bihar, Haryana, Madhya Pradesh, Uttar Pradesh East and West as well as Gujarat regions under a license that expires in 2032, according to an exchange filing Thursday.
Billionaire Kumar Mangalam Birla’s Idea Cellular Ltd. on Wednesday evening called off its November pact to buy Videocon airwaves for two areas. Carriers are racing to load up on spectrum before India’s richest person, Mukesh Ambani, launches his fourth-generation wireless services later this year. Companies are seeking consolidation in a market where as many as 12 operators fight for over a billion subscribers, driving down tariffs and hurting profits.
Idea, which wanted to buy just the Gujarat and western Uttar Pradesh regions for 33.1 billion rupees in 1,800 megahertz band, called off the deal on March 16, citing no reason.
Idea rose 2.1 percent to 100.50 rupees on Thursday in Mumbai, while Bharti gained 0.7 percent to 340.75 rupees after jumping as much as 4 percent earlier.
Bharti has already announced plans to invest as much as 600 billion rupees ($9 billion) in improving voice and data quality.
The move by Bharti highlights its need to boost its 4G spectrum before Ambani’s Reliance Jio Infocomm Ltd. enters the market, Fitch Ratings Ltd. said in a statement. The Indian telecommunications industry will continue to consolidate and the shake-out would result in five to six operators, it said.