In the first deal of its kind in India, the country’s largest service provider Reliance Jio will procure an 800 MHz spectrum from its superior Bharti Airtel in three circuits or service areas.
The spectrum was purchased for INR 15 billion (USD 201.9 million), including future liabilities.
Airtel will transfer 3.75 MHz from 800 MHz to Jio in Andhra Pradesh (AP), 1.25 MHz in Delhi and 2.5 MHz in Mumbai. This holds Jio’s spectrum at 10MHz in Andhra Pradesh, 10MHz in Delhi and 15MHz in Mumbai.
Jio recently bought 6.25 MHz in AP; and 8.75 MHz and 12.5 MHz, respectively, in the 800 MHz band in Delhi and Mumbai, with a validity period of 20 years. Although this cost the company INR 135 billion ($ 1.8 billion), the acquisition by Airtel represents a significant cost advantage.
“Thanks to the increased spectrum footprint, especially of the neighboring spectrum, and superior infrastructure, RJIP has further increased its network capacity,” Jio said in a press release. The agreement is subject to regulatory and legal approvals.
Constantly increasing circles
All three are Category A rounds with high revenue potential. The deal will allow Jio to increase capacity, while Airtel can monetize unused spectrum.
Airtel, which uses its own 900 MHz spectrum in these circuits, acquired this 800 MHz spectrum after acquiring Tata Teleservices in 2019.
“The sale of 800 MHz blocks in these three circuits allowed us to unlock value from spectrum that was untapped. This is in line with our overall network strategy,” said Gopal Vittal, CEO and CEO (India and South Asia). Bharti Airtel, in a statement issued by the company.
It is clear that this is a win-win agreement between the two bitter rivals and he hopes that there will be more such cases of mutual cooperation.
?? Gagandeep Kaur, Associate Editor, Special for Light Reading