Bharti Airtel on Friday said it closed a pact to transfer the 'Right to Use' of its 800 MHz spectrum in three circles to rival Reliance Jio for Rs 1,004.8 crore. In addition, Jio will assume future liabilities of Rs 469.3 crore relating to the spectrum.
In April, Jio had signed an agreement with Airtel to acquire a portion of spectrum in 800 MHz band for Andhra Pradesh, Delhi, and Mumbai circles at an aggregate value of Rs 1,497 crore. Jio now has its holding in these circles to 10MHz, 10MHz and 15MHz, respectively.
This was the first such deal between the two competitors. The analysts had described this deal a win-win for both the parties.
In case of Jio, the analysts had said with the remaining validity of 14 years, the implied cost/MHz/annum comes to Rs 14 crore, 50 per cent discount to the auction price. It has saved Jio around $400 million.
The pact is useful for Bharti Airtel, which had acquired this spectrum from Tata for little consideration and has remained unutilised. Telecom spectrum or airwaves come in different bands for different requirements for the transmission of voice and data.
The lower spectrum bands like 800 Mhz and 900 Mhz provide greater indoor coverage, while bands like 2300 MHz or higher frequency bands have superior transmission capability. The airwaves are sold in quantities measured as MHz.
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