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In an attempt to reduce debt before a possible merger with Reliance Communications, Aircel is in talks with other operators, including Bharti Airtel and Vodafone India, to sell a part of its spectrum.
Aircel has a debt of around ₹20,000 crore on its books, and is looking to reduce it to ₹10,000 crore by selling some of its spectrum in the 2300 MHz band, sources close to the development told BusinessLine .
4G airwaves The company had paid ₹3,438 crore to win 4G airwaves in the 2,300 MHz band in the 2010 spectrum auctions in eight circles. However, it has not been able to launch 4G services across all these circles yet.
The sources said that reduced debt will ensure that Aircel’s promoters get a higher stake in the merged entity. Aircel also has spectrum in 1,800 MHz, 900 MHz and 2,100 MHz bands but these may be retained as the operator is using them for its existing operations.
Besides, these spectrum bands are better suited for data services and valuable for the merged entity. The 2300 MHz band, though earmarked for 4G services, is less efficient and can be used for 2G and 3G underlying network.
“We keep receiving proposals from various quarters and review them from time to time. At this stage, we have nothing concrete for us to take it to our board,” an Airtel spokesperson said. When contacted, a Vodafone India spokesperson declined to comment.
3-way merger On Tuesday, RCom said it has initiated talks for a three-way merger with Aircel and MTS, a deal if it goes through will make the combined entity the second-largest operator in the country in terms of subscribers.
“All telecom operators are talking to each other to find out the best synergy and combination as the sector is gearing up for consolidation. The race is to grab more spectrum and more revenue market share and these two factors will determine the alliances,” a telecom analyst said.
RCom has initiated discussions with the shareholders of Aircel — Malaysia-based Maxis Communications Bhd and Sindya Securities and Investments Pvt Ltd. Simultaneously, it is in talks with AFK Sistema, the Russian promoters of MTS. The contours of the merger, in terms of shareholding or financial transactions, were not disclosed.
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