Bharti Airtel is acquiring Norwegian operator Telenor's India unit in seven circles, as consolidation continues to gain currency in the Indian telecom industry since Reliance Jio started operations. As part of the agreement, Airtel will acquire Telenor India's spectrum, licenses and operations; Telenor's user base stands at 44 million, while Airtel leads the market with 269 million subscribers.
Financial terms of the Airtel-Telenor deal, which needs regulatory approval to pass, have not been disclosed.
Telenor holds spectrum in the 1800MHz band in Andhra Pradesh, Bihar & Jharkhand, Gujarat, Maharashtra, Assam, UP East, and UP West circles. Airtel will take over outstanding spectrum payments and other operational contracts, including tower lease, a joint statement said.
The Airtel-Telenor consolidation comes soon after Vodafone and Idea officially acknowledged merger talks; the Vodafone-Idea merger is expected to be finalised within a month. The joint entity would create the biggest telecom operator in India, with user base and revenues far ahead of Airtel's.
Vodafone-Idea Deal Could Speed Up India Telecoms Consolidation
The entry late last year of Reliance Industries' wireless carrier Reliance Jio into India's crowded telecom sector with its free voice and deeply discounted data plans has pushed rivals to slash costs, sharply eroding the profits of incumbents such as Airtel and Idea.
Previously, Reliance Communications had entered into an agreement to merge its wireless business with smaller rival Aircel.
Bharti Airtel reported its lowest profit in four years in the October-December quarter, while No. 3 player Idea Cellular posted its first-ever quarterly loss for the same period.
Reliance Jio Rivals See Washout in Q3, Losses Likely to Extend to Q4: Reports
"The decision to exit India has not been taken lightly. After thorough consideration, it is our view that the significant investments needed to secure Telenor India's future business on a standalone basis will not give an acceptable level of return," Sigve Brekke, CEO of Telenor Group, said in a statement.
Shares of Bharti Airtel, in which Singapore Telecommunications is the second-biggest shareholder, jumped 5.5 percent in early Mumbai trade after the deal was announced.
With inputs from Reuters
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