Reliance Jio effect: Bharti Airtel gets Telenor for free

 

LATEST NEWS – In what will lead to yet another multinational exit in the telecom space, Bharti Airtel on Thursday announced the acquisition of Telenor India. It’s a no-cash deal, which will see Norway’s telco packing up and leaving the country, as business had become unsustainable.

While the companies refused to speak on the size of the deal, sources in the know pegged Bharti’s cost of acquisition at Rs 1,600 crore. This money will be used for paying the outstanding amount for the spectrum that Telenor has acquired, it is learnt. Bharti Airtel will also take over Telenor’s contracts for tower lease and infrastructure.

The spectrum payment will be made in phases for the next 10 years. Saying that telecom was a “spectrum game’’, a source added the additional spectrum of 43.4 MHz in the 1,800-MHz band, known for 4G data efficiency, coming from Telenor, was expected to be “more than sufficient for Bharti over the next four to five years”.

Bharti claimed the acquisition would bolster its footprint with the additional spectrum band, besides eliminating smaller and fringe players.

Whether the deal would help Bharti take on Reliance Jio in the fiercely competitive environment, an analyst said, “Market forces along with customer service and network quality would determine the winner.’’

The acquired company’s debt of about Rs 1,500 crore will be serviced by Telenor itself, executives said. READ MORE

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s