Bharti Airtel to buy airwaves from Aircel to further strengthen its 4G spectrum holding

Announcement of this deal comes less than a month after Airtel said it would buy Videocon Telecom’s 4G spectrum in six circles.

“With the above acquisition, Bharti Airtel would become a pan-India 4G operator,” the company said in the filing to the stock exchanges.

Bharti Airtel said it would buy 20 MHz of 4G spectrum, which was allotted to Aircel and its subsidiary Dishnet, and is valid till September 20, 2030.

Experts believe that the imminent launch of Mukesh Ambani’s telecom venture Reliance Jio has spurred consolidation in the sector wherein bigger fish are gearing up and the smaller ones are jumping ship by either selling off their spectrum or merging with other companies.

Airtel’s deal with Aircel is preceded not only by its deal with Videocon but also by Anil Ambani-led Reliance Communications plans to acquire interests in MTS and Aircel.

The highly competitive telecommunications industry in India, with more than 10 players, has been complaining about the abysmally low voice and data pricing regime that has been adopted for the sake of competition. Reliance Jio’s launch is expected to further fuel this fire.

Industry analysts believe that while the price war would only be a hiccup for larger incumbents, for smaller companies like Aircel and Videocon the exit route seems to be the better one saving themselves injuries from higher competitions.

Historically, telecom companies have followed a trend according to which if one of the service providers announces a cut in tariffs, others invariably follow. The same is expected when Jio launches with low tariffs to win customers.

However, Airtel strengthening its 4G spectrum portfolio is also expected to help the Sunil Mittal-led company to service its subscribers better with a strong ground leading to Reliance Jio’s launch. The acquisition is also likely to keep Airtel better placed ahead of the upcoming spectrum auctions.