India's largest telecom operator Bharti Airtel Thursday announced it reached an agreement to acquire Videocon Telecommunication's spectrum in six circles. The deal is valued at Rs 4,428 crore.
Bharti Airtel will buy acquire Videocon's spectrum in Haryana, Bihar, Uttar Pradesh (East), UP (West), Gujarat and Madhya Pradesh. The transaction was announced hours after Idea Cellular terminated an ongoing spectrum trading agreement to purchase Videocon's Gujarat and West UP circles for Rs 3,310 crore, the Economic Times reported.
"Bharti Airtel has entered into a definitive agreement with Videocon Telecommunications Limited to acquire, at an aggregate consideration of Rs 4,428 crore rights to use 2X5 MHz spectrum in the 1800 MHz band," Bharti Airtel said in a regulatory filing to the Bombay Stock Exchange.
The spectrum deal is reportedly valid up to 2032.
Post the deal, Airtel's 4G coverage would be extended to 19 circles, which at present is 15 circles, Moneycontrol reports.
In the Indian telecom sector, spectrum deals have reportedly been on the rise ever since the Central government approved spectrum sharing and trading guidelines. Under the new rule, spectrum trading allows companies to transfer their spectrum rights to other telecom firms.
"The closing of the transaction is subject to satisfaction of the standard conditions (including conditions stated in spectrum trading guidelines), as are normal to such transactions," Bharti said in the regulatory filing.
Last week, it was reported that Bharat Sanchar Nigam Limited (BSNL) is in talks with Bharti Airtel for a possible spectrum sharing deal. The deal is expected to be finalised by June 2016.
Stocks of Bharti Airtel were trading at Rs 346. 90 at around 1.30 p.m. Thursday on the BSE, up 2.30 percent from its previous close. Earlier in the day, it had risen 3.83 percent.
Videocon Industries stock was trading at Rs 116.30 at around 1.45 p.m, up 6.31 percent from its previous close. Videocon Telecommunications is a subsidiary of Videocon Industries.