The country's biggest telecom companies Bharti Airtel and Vodafone India are planning to acquire some spectrum from beleaguered Reliance Communications (RCom) to increase their spectrum strength, sources aware of the development have said.
The Anil Ambani-owned telecom company is reeling under pressure of debts to tune of Rs 45,000 crore. The company is selling the spectrum with an aim to lower its debts, reported Economic Times.
The telcos are looking for RCom's 2,100 MHz spectrum in 13 circles – Delhi, Mumbai, Kolkata, Punjab, Madhya Pradesh, Bihar, Assam, Northeast, Himachal Pradesh, J&K, Odisha, West Bengal and Rajasthan, sources said.
Further, the companies may also like to tap RCom's 900 MHz spectrum in Himachal Pradesh and Madhya Pradesh and use it for 4G services, the business daily reported.
Experts believe Bharti Airtel and Vodafone will get an edge in the telecom war waged by the new entrant Reliance Jio Infocomm by augmenting the spectrum holdings.
They further said the bids are likely to be lower than market rates because all major operators bought spectrum in October 2016.
"There is no immediate desperation to buy RCom's spectrum in 900 or 2100 MHz bands, but if the valuations are good and there is a business case, Vodafone could explore select acquisitions," ET quoted an industry insider as saying.
Based on the rates in the October 2016 sale, analysts have pegged the market value of the 2,100 MHz spectrum for 13-year validity at around Rs 5,700 crore.
"The company has received a lot of interest for its spectrum in both the 900 MHz and 2,100 MHz bands from various telcos," a senior RCom official told ET.
Industry experts stated that Airtel might take this opportunity to tap RCom's 2,100 MHz band in key markets such as Kolkata and Punjab, while Vodafone could do the same in Madhya Pradesh, Himachal Pradesh and J&K.
RCom's troubles were compunded on Thursday when China Development Bank filed an insolvency case against the company under the Insolvency and Bankruptcy Code, sources aware of the development confirmed.
The Chinese bank lent close to Rs 11,570 crore ($1.78 billion) to the Anil Ambani-owned company. The bank filed the insolvency petition before the Mumbai bench of the National Company Law Tribunal (NCLT).