Bharti Airtel-Telenor deal: 5 reasons why it had to happen
NEW DELHI: Aggressive entry of Reliance Jio in the Indian telecom sector has triggered major consolidation. Bharti Airtel's decision to buy Telenor's India operations is the third consolidation this year after Vodafone-Idea and Reliance Communications-Aircel-Tata teleservices talks for a merger. Bharti Airtel needs to counter Jio's freebies and the prospect of the biggest telecom company Vodafone-Idea merger will create.
Below are five takeaways from Bharti Airtel's move to consolidate its position in the telecom battlefield:
1. The spectrum gain
The defining feature of Bharti Airtel's acquisition is spectrum. Spectrum matters more than anything else for Bharti Airtel in this deal. Telenor will give Bharti Airtel an additional 43.4 MHz spectrum in the 1800 MHz band. This will boost Aitel's already robust spectrum kitty.
2. The 4G edge
The spectrum gain from Telenor acquistion will add critical value to the company when fast data has come to rule the Indian telecom market. Bharti Airtel is rolling out its 4G services in 1,800 MHz band and 2,100 Mhz band. Telenor's 43.4 MHz spectrum in the 1800 MHz band will certainly power Bharti Airtel's 4G services.
3. The subscriber base
The Telenor acquisition will give Bharti Airtel 52.5 million subscribers. This will be a significant addition to Bharti Airtel's 269 million subscriber base in the country, especially when Vodafone’s 205 million subscribers and Idea's 190 million add up to a big challenge to the company, not to forget Reliance Jio making biggest subscriber gains in recent months.
4. Most-valued footprint
Telenor's operations will empower Bharti Airtel in India's most densely populated regions. Telenor has operations in seven circles: Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam. All these regions are now crucial for telecom companies as they are not only densely populated but also hold vast potential as mobile services and infrastructure spread in the under-served interiors of India at a rapid pace.
5. Beating the rivals
Early this month, there were reports about Telenor looking to merge its India operations with Reliance Communications. Bharti Airtel's swift swoop on Telenor has given it an edge over its rivals as Telenor would have been bought by Bharti Airtel's rivals sooner or later due to growing consolidation after Reliance Jio's entry.
Below are five takeaways from Bharti Airtel's move to consolidate its position in the telecom battlefield:
1. The spectrum gain
The defining feature of Bharti Airtel's acquisition is spectrum. Spectrum matters more than anything else for Bharti Airtel in this deal. Telenor will give Bharti Airtel an additional 43.4 MHz spectrum in the 1800 MHz band. This will boost Aitel's already robust spectrum kitty.
2. The 4G edge
The spectrum gain from Telenor acquistion will add critical value to the company when fast data has come to rule the Indian telecom market. Bharti Airtel is rolling out its 4G services in 1,800 MHz band and 2,100 Mhz band. Telenor's 43.4 MHz spectrum in the 1800 MHz band will certainly power Bharti Airtel's 4G services.
3. The subscriber base
The Telenor acquisition will give Bharti Airtel 52.5 million subscribers. This will be a significant addition to Bharti Airtel's 269 million subscriber base in the country, especially when Vodafone’s 205 million subscribers and Idea's 190 million add up to a big challenge to the company, not to forget Reliance Jio making biggest subscriber gains in recent months.
4. Most-valued footprint
Telenor's operations will empower Bharti Airtel in India's most densely populated regions. Telenor has operations in seven circles: Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam. All these regions are now crucial for telecom companies as they are not only densely populated but also hold vast potential as mobile services and infrastructure spread in the under-served interiors of India at a rapid pace.
5. Beating the rivals
Early this month, there were reports about Telenor looking to merge its India operations with Reliance Communications. Bharti Airtel's swift swoop on Telenor has given it an edge over its rivals as Telenor would have been bought by Bharti Airtel's rivals sooner or later due to growing consolidation after Reliance Jio's entry.
