Billionaire Mittal Buys Aircel's Airwaves to Boost 4G Servicesby
Aircel spectrum will enable Airtel to have pan India 4G reach
Airtel will pay 35 billion rupees for 2,300 Mhz spectrum
Bharti Airtel Ltd., India’s largest wireless operator, said it will buy airwaves from Aircel Ltd. taking its spectrum acquisitions this year to $1.2 billion as it prepares to counter Reliance Industries Ltd. that’s starting fourth-generation wireless services this year.
The company controlled by billionaire Chairman Sunil Mittal will spend 35 billion rupees ($524 million) to purchase airwaves from Aircel in eight areas, Airtel said in a statement on Friday. The New Delhi-based company bought spectrum from Videocon Telecommunications Ltd. for $663 million last month.
Airtel is adding spectrum as it gears up to fend off competition from Reliance, controlled by Mukesh Ambani, India’s richest man, which is investing 1.5 trillion rupees in its 4G services. Companies are seeking consolidation in a market where as many as 12 operators fight for over a billion subscribers, driving down tariffs and hurting margins.
The carrier will use the 2,300 megahertz band 4G spectrum for services in Tamil Nadu, Bihar, Jammu & Kashmir, West Bengal, Assam, North East, Andhra Pradesh and Orissa under a license that expires September 2030, according to an exchange filing. With Aircel’s airwaves, Airtel will become a pan-India 4G operator, it said in the filing.
Airtel’s shares rose 1 percent to 334.6 rupees in Mumbai. The announcement came after market close.
Bharti has announced plans to invest as much as 600 billion rupees in improving voice and data quality. Today’s transaction is subject to regulatory approval, the filing said.