The telecom industry is all set to witness a new merger deal as Bharti Airtel has today announced that the company has entered into a definitive agreement to acquire Telenor India assets. Previously, Vodafone confirmed that it has been in talks with Aditya Birla Group for its merger with Idea Cellular.
Under this agreement, Airtel will take over Telenor India’s spectrum, licenses and operations, including its employees and customer base. Telenor’s operations and services will continue as normal until the completion of the transaction. The deal will further allow Airtel to acquire Telenor India’s operations in seven circles including, Andhra Pradesh, Bihar and Jharkhand, Gujarat, Maharashtra, UP East and UP West, and Assam.
Further, the company will be benefited with the addition of 43.4 MHz spectrum in the 1800 MHz band. As part of the agreement, Airtel will also take over outstanding spectrum payments and other operational contracts, including tower lease. However, the transaction is subject to requisite regulatory approvals, including approvals from the Department of Telecommunications in India (DoT) and the Competition Commission of India.
The recent acquisition will give a big boost to Airtel, who has been struggling to keep its dominance in the telecom industry after incumbent Reliance Jio introduced it’s aggressive data and voice plans, which has sparked the war to give more data at affordable price. Vodafone and Idea merger, on the other hand, has also posed a threat to Airtel as the combined market share of the both the companies will reach around 43 per cent, beating Airtel’s current 32 per cent market share. Therefore, it would be interesting to see whether the acquisition will allow Airtel to sustain its dominant position in the industry or not.
Commenting on the acquisition Gopal Vittal, Managing Director and CEO (India and South Asia), Bharti Airtel, said, “ On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position considerably in several key circles. The customers of Telenor India will be able to enjoy India’s widest and fastest voice & amp; data network, and a range of Airtel’s world-class products and services.”