Bharti Airtel, Reliance Jio and Investment Firms Finish Bidding for Aircel Assets Sale

Malaysia’s Maxis owned, Aircel had to face the tough front of insolvency this year after facing brutal competition from the entry of Reliance Jio Infocomm into the market in 2016. Now to pare off its debt to financial and operational creditors, the company is looking forward to selling its assets to the highest bidder. Among the takers for Aircel assets, Bharti Airtel, Reliance Jio, Sterlite Technologies and two other investment firms seem to be in line. Two people aware of the matter said that the lenders of Aircel, however, believe that a lump sum sale to a single buyer would result in a much better deal.

airtel-jio-aircel-assets-sale

Aircel Wishing to Sell to a Single Buyer

One of the people mentioned above to Livemint that although the bids have been received and the bidding closed on Monday, talks are going on about selling the assets to a single buyer which would result in a better price. The person said, “In a couple of days, these talks should happen. We are hoping to get over Rs 25,000 crore from asset sale proceeds.” It’s noteworthy, that Aircel Cellular Ltd and Dishnet Wireless Ltd, together known as Aircel, owe Rs 15,545 crore to financial creditors, and approximately Rs 35,000 crore to operational creditors.

Also, in October last year, things went downhill for Aircel when Reliance Communications didn’t give heads up to the asset merger deal with Aircel citing legal and regulatory discrepancies. RCom had said, that there was also, “intervention of vested interests to derail the deal”. Following the sabotage of this deal, Aircel filed for bankruptcy in February citing reasons like unsustainable high debt and widening losses.

Widening Losses Pushed Aircel to Insolvency

As per Aircel’s lawyer, the company’s assets are worth Rs 32,362 crore and it holds 65 MHz spectrum in the 2,100 MHz band, 103 MHz spectrum in the 1,800 MHz bands, and 21 MHz spectrum in the 900 MHz band. However, the specifics of other assets like fibre and towers and remain unknown. The sale of assets if goes north of Rs 25,000, would mean a sigh of relief for the financial lenders of Aircel including State Bank of India, Punjab National Bank and Bank of Baroda.

Lenders Pleased with the Pricing

As per a report by Livemint, the sole bidder of Aircel’s spectrum asset is Bharti Airtel whereas the only bidder for the telecom towers is Reliance Jio. Along with that, firms like I Squared Capital, and distressed asset fund Aion Capital also remain behind them as bidders for Aircel’s assets. The second person among the above two mentioned sources, said “Deloitte is very happy with the outcome, which exceeded everyone’s expectations. We will know final decisions on winners probably in four weeks’ time… the bids were being opened on Wednesday.”

Back in April in 2016, Airtel had announced buying spectrum worth Rs 3,500 crore from Aircel in circles of Tamil Nadu (including Chennai), Bihar, Jammu and Kashmir, West Bengal, Assam, the North-East, Orissa and Andhra Pradesh. Also, in 2010, Chennai Network Infrastructure Ltd, a unit of GTL Infrastructure Ltd had bought 17,500 towers and 21,000 tenancies from Aircel for Rs 8,000 crore.

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23 Comments on "Bharti Airtel, Reliance Jio and Investment Firms Finish Bidding for Aircel Assets Sale"

 

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RAJASHANKAR D
September 20, 2018 11:35 pm 11:35 PM

Avoid removed all top up plans except 10rs and introduced 25 35 65 and so on but with validity

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Priyansh Singh
September 21, 2018 9:28 pm 9:28 PM

+?

Sudhakar
September 21, 2018 6:40 pm 6:40 PM

Talkvalue may be main balance. Ask them again.

Chetan | Bangalore
September 20, 2018 5:52 pm 5:52 PM

Looks like Jio is not keen on deploying/buying addtional band 1 from Aircel as it calls for additional system modification on its existing sites. It requires new RF radio antenna, SSU etc as exisiting one only support 2300, 1800 and 850 MHz band… TBH they don’t have space also to mount new antennas now on their own monopoles . Not sure what it will do after its gets band 1 from RCom?? Spectrum and capacity roadmap not clear from Jio…

Kanaga Deepan N, Sivakasi (T.N.)
September 22, 2018 10:11 am 10:11 AM
Chetan Bhai… I wonder how you missed the master stroke by Jio here. Even though Airtel is the highest bidder for spectrum, [1] Aircel recovery team wants to sell everything to singer buyer as its better deal comparing selling items to individual buyers. (U know who is the single buyer, right) [2] Jio is the ONLY bidder for towers. This proves clearly Jio is the ONLY single buyer, who is buying everything. This means, Jio is going to get Aicel spectrum, even after giving lesser quote for the same. But honestly, I dont want Jio to go for Band 1… Read more »
Nikhil Mumbai-Pune
September 22, 2018 5:04 pm 5:04 PM
Airtel and Void has enough spectrum in band 1. Why they need more spectrum through auction(except Airtel in Kolkata circle)? There is no need for spectrum in band 1/3/5 to Avoid. They already have enough. Jio can acquire all from auction at base price only if Airtel gives all their spectrum in band 5. AIRTEL AND VoID have enough band 1 and band 3 spectrum in my honest opinion. Void needs band 40 spectrum but they won’t get it if Jio tries to drop the plan of band 1,Jio will go all blazing guns for 20Mhz PAN India in band… Read more »
Vipin (Mumbai)
September 23, 2018 11:32 am 11:32 AM
@Nikhil. Spectrum is not available in B40 . Unless DOT gets it released from defense and other govt agencies. Chances are very less till next auction. Technically B40 has 100 Mhz bandwidth. Most circles 60 Mhz has been allotted. Considering number of subscribers and quantum of data being used, Jio would require much more that 10 MHz in Band 3, which is scarce. Yes, in B5 Jio can go for 20 Mhz. But this comes with huge cost. This is why Jio is in Trouble and i’m concerned of their planning. They started with bang but are in troubled waters… Read more »
Nikhil Mumbai - Pune
September 23, 2018 4:00 pm 4:00 PM

I don’t feel voice quality of Jio is unreliable anywhere in Mumbai. I use Redmi Note 4. I have used Vodafone as well. Vodafone has good voice quality as well. Airtel have worst voice quality in Mumbai but speeds are great in Mumbai for Airtel.

Vipin (Mumbai)
September 23, 2018 10:22 pm 10:22 PM

For voice quality atleast call should get connected. In Jio, call itself (incoming or outgoing) doesn’t get connected at places where subscriber density is more. Data is also not stable. Myself and my friends gave up using Jio.

Nikhil Mumbai-Pune
September 24, 2018 6:47 pm 6:47 PM

Airtel data works super fine in Mumbai. You can try that.

Nikhil Mumbai-Pune
September 24, 2018 6:47 pm 6:47 PM

I never faced any problems in Jio call quality. I have used it in RN4/One Plus 3T/5T/RN5/J7 Pro/S8+/S9+ . No problems whatsoever.

Rhishav (Kolkata)
September 24, 2018 12:22 pm 12:22 PM

+1 I agree with Vipin. There are places in Kolkata top were calls don’t connect. Only solution for Jio is to install small cells to support the existing infrastructure otherwise people will just leave Jio.

Nikhil Mumbai - Pune
September 23, 2018 3:58 pm 3:58 PM

DOT going to release 20Mhz Pan India from defense and other govt agencies before next auction. I guess they already have. 20Mhz is released from Band 41 as well. We need speeds. Band 5/3 will give you coverage not speeds.

Vishal | Chennai
September 21, 2018 2:58 pm 2:58 PM

And I think their antennas don’t even supports band 41 2500Mhz

Vishal | Chennai
September 21, 2018 2:49 pm 2:49 PM

+1 only way is to get spectrum in existing frequency. As I posted a pic of Jio antenna it supports only band3;40. But I am not sure about the second antenna specs may be it supports 700Mhz,2100Mhz

sanjay
September 21, 2018 1:52 pm 1:52 PM

Their monopoles are small and fully occupied with 6 antennas in my city.

Vipin (Mumbai)
September 21, 2018 12:25 pm 12:25 PM
Rightly said. Even I thought that Jio will go for 2100 Mhz band. But now it is not clear what Jio is planning. 850 Mhz band is costly and has limited inventory and also doesn’t help in Capacity improvement. 1800 Mhz band has lot of competition due airtel & VodaIdea and less inventory. Same is case for 2300 Mhz, which also has limited inventory until government gets released some quantum from govt agencies. Availability in 2100 Mhz band is good as Airtel & VodaIdea already have >10Mhz chunk in most circles and even after BSNL is allotted 5Mhz slot. With… Read more »
Nikhil Mumbai-Pune
September 22, 2018 7:41 am 7:41 AM
Jio cannot have 10Mhz of band 1 spectrum in all circles in current scenario after Government alloted 5Mhz of band 1 spectrum to BSNL. AVOID doesn’t need Band 1 spectrum. Airtel might need in Bengal. Also Jio can buy all the spectrum remaining in band 3 now. Band 3 spectrum is enough at Avoid. Airtel badly needs Sub GHz spectrum in few circles and few circles they need Band 40 spectrum . It is band 40 spectrum all needs. Void may target band 41 spectrum in Karatanaka and Tamil Nadu circles as well. If Jio is not buying band 1… Read more »
Aniruddha Dhar|Santragachi|West Bengal
September 21, 2018 11:58 am 11:58 AM

Jio will keep adding spectrum in 850, 1800 & 2300mhz. They don’t need any other. Its evident from the article is that they are interested in new towers and tenancies as they are finding it difficult to deploy additional towers of their own due to local permission problems.

saket
September 21, 2018 10:16 am 10:16 AM

Most of Jios anetenna are dual band, for 3 band they installed 2 antenna with 2 slot each.

Hence 1 slot is empty , JIO can occomodate band 1 coming from RCOM+Aircel. (almost all circle of these two are mutually exclusive, thus can easily form 5Mhz band 1 at PAN india level

Nikhil Mumbai-Pune
September 22, 2018 7:43 am 7:43 AM

All the three bands above 1800 Mhz need 10Mhz to work properly. No point in keeping such a low spectrum.

Nikhil Mumbai-Pune
September 21, 2018 8:03 am 8:03 AM

They might trade off band 1 spectrum from RCOm with Vodafone-Idea as they need it for deploying 4G LTE.

Nikhil Mumbai-Pune
September 21, 2018 8:02 am 8:02 AM

They will try to get band 5/3/40/41 spectrum in upcoming auction. 5 from 5. Some from 3 so that they complete 10MHZ. 20Mhz from band 40. 10Mhz from band 41.

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