India's leading telco Bharti Airtel said that it has entered into a definitive agreement with Telenor South Asia Investments to acquire the latter's India operations, Telenor Communications Private Limited or Telenor India. The move will allow Airtel to further bolster its strong spectrum footprint in these seven circles, with the addition of 43.4 MHz spectrum in the 1800 MHz band. Also, Airtel will also be able to expand its user base following the acquisition, which is subject to requisite regulatory approvals.
As part of the agreement, Airtel will acquire Telenor India’s running operations in seven circles - Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam.
Airtel said that these circles represent a high population concentration and therefore offer a high potential for growth.
The move comes at a time when the industry is going through an intense consolidation phase with Vodafone and Idea involved in merger talks and Reliance Communications finalising its acquisition of MTS India and a merger with Maxis-owned Aircel. Analysts say that Reliance Jio's entry with disruptive voice and data offers is driving consolidation in India.
The proposed acquisition will include the transfer of all of Telenor India’s assets and customers, further augmenting Airtel’s overall customer base and network.
Airtel said that it would ensure quality services to Telenor India’s customers, while offering them the added benefits of its innovative product portfolio, access to superior voice & data services, mobile banking, VAS and domestic/ international roaming facilities. Telenor India’s operations and services will continue as normal until the completion of the transaction.
"The agreement underlines our commitment to lead India’s digital revolution by offering world-class and affordable telecom services through a robust spectrum portfolio spread across multiple bands. 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 in several key circles. The customers of Telenor India will now be able to enjoy India’s widest and fastest voice & data network, and a range of Airtel’s world-class products and services," Gopal Vittal, Managing Director and CEO (India and South Asia), Bharti Airtel, said in a joint statement.
“The acquisition of additional spectrum through this transaction, which made an attractive business proposition, has further enhanced our already robust spectrum portfolio. The proposed transaction will also create substantial long-term value for our shareholders given the significant synergies,” added Vittal.
Sigve Brekke, Chief Executive Officer of Telenor Group, said the today’s agreement is in the best interest of our customers, employees and Telenor Group. Finding a long term solution to our India business has been a priority for us, and we are pleased with our agreement with Airtel.
"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,” he added.