While talks about Vodafone-Idea merger is still brewing in the Indian telecom space, the country’s largest telecom services provider, Bharti Airtel has entered into a definitive agreement with Gurgaon-based mobile network operator Telenor to acquire its assets and customers in India.
As the new owner, Airtel will also take over Telenor India’s spectrum, licenses and operations, including its employees and customer base which reportedly stands at 44 million. Telenor explained that its operations and services will continue as normal until the completion of the transaction, which is expected to close within 12 months.
“We believe today’s agreement is in the best interest of our customers, employees and Telenor Group. Finding a long term solution to our India business has been a priority for us, and we are pleased with our agreement with Airtel,” said Sigve Brekke, Chief Executive Officer, Telenor Group.
“The decision to exit India has not been taken lightly. After thorough consideration, it is our view that the significant investments needed to secure Telenor India’s future business on a standalone basis would not have given an acceptable level of return,” he added.
With Telenor acquisition, Bharti Airtel will bag an additional 43.4 Mhz spectrum in the 1,800 MHz band besides getting a foothold in seven circles — Andhra Pradesh, Assam, Bihar, Gujarat, Uttar Pradesh (East and West) and Maharashtra — where Telenor operates in. As part of the agreement, Airtel will also take over outstanding spectrum payments and other operational contracts, including tower lease.
“On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position considerably in several key circles,” said Gopal Vittal, Managing Director and CEO (India and South Asia), Bharti Airtel.
The acquisition comes at a time when Reliance Jio and its unrivalled 4G LTE services have shaken the Indian telecom sector by reportedly bagging more than 100 million subscribers in a matter of 170 days. But other telecom players have also sensed the emerging danger, which has initiated merger talks between the number two and number three telecom service providers of the country, Vodafone India and Idea Cellular respectively. This will not just be a tough combat against Reliance Jio’s tumultuous growth but also challenge Airtel’s dominance in the country.