Comments
The ongoing consolidation in the telecom space has forced Tikona Digital Networks to sell its 4G spectrum to Airtel seven years after acquring it. Though both companies declined to share the financial details, investment banking sources pegged the deal at around ₹1,600 crore.
Tikona, a company controlled by former Reliance Communications CEO Prakash Bajpai, had acquired the spectrum in 2010 for ₹1,058 crore. However, the company could not utilise the spectrum all these years due to lack of funding.
The deal, which is expected to be completed in 60 days, includes 350 telecom towers owned by Tikona.
Bharti Airtel will also assume Tikona’s debt of about ₹450-500 crore, said sources close to the development.
For Tikona, the deal will allow it to be debt free and focus on its existing business of providing broadband services using unlicensed spectrum. Bajpai had tried to use the 4G spectrum to expand the business but could not raise funds. The deal with Airtel, therefore, provides the company a good exit.
“Now, 4G is the mainstay in the market. The spectrum we had acquired was very valuable, but it took sometime for the industry and technology to mature and devices to become available. Obviously the spectrum can generate a lot of value now,” Bajpai told BusinessLine .
More 4G airwaves For Airtel, the deal means more 4G spectrum to take on Reliance Jio. Tikona holds 20 MHz of spectrum in the 2300 MHz band in the Gujarat, Uttar Pradesh (East), Uttar Pradesh (West), Rajasthan and Himachal Pradesh circles.
After the deal, Airtel will hold 30 MHz in the 2300 MHz band in 13 circles. This is the fourth major acquisition by Airtel in the last year. The telecom industry is consolidating from 10-12 operators to 4-5 players.
“After the Vodafone-Idea deal, this is another step towards consolidation in the Indian telecom sector. Future expansion and growth will depend on the quantum of spectrum held and the quality of services offered. Such acquisitions help operators address these issues,” said Rishi Tejpal, Principal Research Analyst at Gartner.
rajesh.kurup@thehindu.co.in
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.