Bharti Airtel to acquire Tikona Networks’ 4G business

By : |March 24, 2017 0

Indian telecom sector is witnessing yet another consolidation move with Bharti Airtel entering into a definitive agreement with Tikona Digital Networks to acquire Tikona’s 4G Business including the Broadband Wireless Access spectrum and 350 sites, in five telecom circles, the country’s largest telecom operator announced on Thursday.

The deal size is “approximately Rs1,600 crore”, Bharti Airtel said in a regulatory filing.

Tikona currently has 20 MHz spectrum in the 2300 MHz band in Gujarat, UP (East), UP (West), Rajasthan and Himachal Pradesh circles. Airtel plans to roll out high-speed 4G services on the newly acquired spectrum in the five circles immediately after the closure of the transaction.

                                 

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As per the agreement, the acquisition of the 4G business in Gujarat, UP (East), UP (West) and Himachal Pradesh will be undertaken by Airtel, while in the Rajasthan circle, it will be accomplished through Airtel’s subsidiary Bharti Hexacom Limited. Post-acquisition, the combined spectrum holding of Airtel in these five circles will be within the spectrum caps prescribed by the Government.

The deal announced a few days after Vodafone and Idea’s merger announcement will also narrow the gap between Airtel’s pan-India 4G spectrum capacity and Vodafone-Idea’s and Reliance Jio’s, although the difference will still be significant.

Bharti Airtel has limited 4G airwaves in the 2300 MHz band in circles where Tikona, a Mumbai-based network solutions provider, holds spectrum. For example, in UP (East), UP (West) and Rajasthan, it has no airwaves in the 2300 MHz band. In Gujarat and Himachal Pradesh, it has 10 MHz each.

“Airtel’s acquisition of Tikona’s 4G spectrum fills the gap that it had in the TDD-LTE band mainly in UP East, UP West and Rajasthan circles. With this acquisition Airtel will have nationwide TDD-LTE spectrum. Combined with FDD-LTE this additional spectrum holding will help Airtel to be future ready for the surging data demands on 4G,” said Rishi Tejpal, Principal Research Analyst, Gartner.

The proposed acquisition will enable Airtel to fill BWA spectrum gaps in the 2300 MHz band in Rajasthan, UP (East) and UP (West), thereby securing a pan-India footprint in the band. The deal will significantly bolster Airtel’s spectrum position in Gujarat and Himachal Pradesh, taking its overall BWA spectrum holding to 30 MHz each in these circles. Post completion of the deal, Airtel will have 30 MHz in the 2300 MHz band in 13 circles giving it a tremendous advantage to handle the surging data demand.

Gopal Vittal, MD & CEO (India & South Asia), Bharti Airtel, said, “Airtel’s continued focus on strengthening its 4G capabilities across multiple spectrum bands will be complemented with the BWA spectrum acquisition from Tikona. We believe that combining our capacities in TD-LTE and FD-LTE will further bolster our network, and help us provide unmatched high-speed wireless broadband experience to our customers. We remain committed to our vision of leading India’s digital revolution by offering world-class and affordable telecom services through a robust spectrum portfolio spread across multiple bands.”

Tikona was founded in 2008 by former Reliance Communications executives Rajesh Tiwari and Prakash Bajpai. Its other investors include Goldman Sachs, Oak Capital, IFC and Everstone Capital. The company will retain its home broadband wireless business.

 

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