Reliance Jio Infocomm (Jio) on Tuesday said it had signed a definitive agreement with Bharti Airtel to acquire the right to use spectrum in the 800-megahertz (MHz) band in Andhra Pradesh, Delhi, and Mumbai circles through spectrum trading.
Jio will acquire 3.75 MHz in Andhra Pradesh, 1.25 MHz in Delhi, and 2.5 MHz in Mumbai. “The aggregate value for the right to use this spectrum is Rs 1,497 crore, inclusive of present value of associated deferred payment liability of Rs 459 crore, subject to any transaction-related adjustments,” Jio said in a statement.
The trading agreement, it said, is in accordance with the spectrum trading guidelines issued by the Department of Telecommunications and is subject to requisite regulatory and statutory approvals.
Gopal Vittal, managing director and chief executive officer, India and South Asia, Bharti Airtel, said: “The sale of 800 MHz blocks in these three circles has enabled us to unlock value from spectrum that was unutilised. This is aligned to our overall network strategy.”
Through this agreement, Airtel will receive a consideration of Rs 1,037.6 crore from Jio for the proposed transfer. In addition, Jio will assume future liabilities of Rs 459 crore related to spectrum.
With this trading of right to use spectrum, Jio will have 2×15 MHz of spectrum in the 800-MHz band in the Mumbai circle and 2×10 MHz of spectrum in the same band in Andhra Pradesh and Delhi circles, thereby further consolidating its spectrum footprint in these circles.
The enhanced spectrum footprint, especially contiguous spectrum, along with superior infrastructure deployed by it, will further increase Jio’s network capacity, it said. The transaction is subject to the requisite regulatory and statutory approvals. Earlier in March, Jio had emerged the highest bidder in the 4G spectrum auction conducted by the government, leaving behind Bharti Airtel and Vodafone Idea. The telco had acquired the right to use spectrum in all 22 circles across India by acquiring spectrum in the 800-MHz, 1,800-MHz, and 2,300-MHz bands. Jio had acquired 488.35 MHz of airwaves for Rs 57,122.65 crore.
The Centre got Rs 77,815 crore from the two-day auction — one of the shortest in a decade. While the amount exceeded government expectations, the total mop-up was far below the Rs 3.92 trillion worth of airwaves put up for sale. Spectrum has been sold across a few preferred bands at the base price.
Article source: https://www.business-standard.com/article/companies/bharti-airtel-sells-spectrum-worth-rs-1-497-crore-to-reliance-jio-121040700097_1.html