Jio Signs Agreement With Airtel To Buy Spectrum Worth Rs 1,497 Crore in Delhi, Mumbai, Andhra Pradesh
Reliance Jio Infocom (Jio) on 6 April said that it had signed a definitive agreement with Bharti Airtel to acquire the right to use spectrum in the 800-MHz band in three circles through spectrum trading.
The transferred spectrum includes those in Delhi (1.2 MHz), Mumbai (2.50 MHz) and Andhra Pradesh (3.75 MHz).
Jio said in a statement: “The aggregate value for the right to use this spectrum is Rs 1,497 crore, inclusive of the present value of associated deferred payment liability of Rs 459 crore, subject to any transaction-related adjustments.”
According to the trading agreement, Gopal Vittal, managing director and chief executive officer, India and South Asia, Bharti Airtel, said that the sale of the 800 MHz blocks in three circles has enabled the company to unlock value from the spectrum that was utilised.
“This is aligned to our overall network strategy,” he added.
The trading agreement between Mukesh Ambani-led RIL’s telecom subsidiary and Bharati Airtel is under the spectrum trading guidelines issued by India’s Department of Telecommunications.
The agreement is also subject to necessary regulatory and statutory approvals.
Through this agreement, Sunil Mittal’s company will receive a consideration of Rs 1,037.6 crore for the proposed transfer from Jio.
Moreover, Reliance Industries’ subsidiary will assume future liabilities of Rs 459 crore relating to the spectrum.
Following the trading, Jio will have doubled its spectrum in Delhi, Andhra Pradesh and Mumbai circles.
It will have 2x10 MHz of spectrum in Delhi, as well as Andhra Pradesh circles and 2x15 MHz of spectrum in the 800-MHz band in the Mumbai circle.
As per the trading agreement, with the enhanced spectrum footprint, specifically the contiguous spectrum and the superior infrastructure deployed by it, Jio’s network capacity will further increase.
However, Jio was also the most aggressive bidder in the 4G spectrum auction, which was conducted in March 2021 by the government of India and ended up purchasing over half of the telecom spectrum.
Leaving behind Bharati Airtel and Vodafone Idea, Jio placed bids for 488.53 MHz of spectrum worth Rs 57,122.65 crore.
Sunil Mittal’s telecommunications services company, on the other hand, had placed bids for 355.45 MHz spectrum worth Rs 18,698.75 crore.
For Aditya Birla Group's Vodafone Idea, the spectrum value bought in auctions was pegged at Rs 1,993.4 crore.
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