Another Jio Effect: Bharti Airtel To Acquire Telenor’s India Operations

On Thursday, Bharti Airtel has entered an agreement to buy Telenor India in what is rumoured to be a Rs 7000 crore deal. However, the deal will be completed after getting the regulatory approvals.

Bharti Airtel has released a statement, which said:

The proposed acquisition will include transfer of all of Telenor India’s assets and customers, further augmenting Airtel’s overall customer base and network. It will also enable Airtel to further bolster its strong spectrum footprint in these seven circles, with the addition of 43.4 MHz spectrum in the 1800 MHz band.”

As part of the deal, Airtel will acquire Telenor India’s running operations in seven circles. These include Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam. According to Airtel, the seven circles “represent a high population concentration and therefore offer a high potential for growth.”

Gopal Vittal, MD and CEO (India and South Asia), Bharti Airtel, has stated:

On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position in several key circles.”

Although this deal certainly means that the Norway-based multinational telecom operator, Telenor Group, will be no more running its operations in India.

Sigve Brekke, CEO of Telenor Group, has said:

We believe today’s agreement is in the best interest of our customers, employees and Telenor Group. Finding a long term solution to our India business has been a priority for us, and we are pleased with our agreement with Airtel.

The decision to exit India has not been taken lightly. After thorough consideration, it is our view that the significant investments needed to secure Telenor India’s future business on a standalone basis will not give an acceptable level of return.”

The telecom industry war in India is spicing up after the entrance of Reliance Jio. The Mukesh Ambani-owned telecom company has been providing free services since September 2016 as part of its introductory offer and has since amassed over 100 million customers in 170 days.

This scheme by Jio attracted many customers from their rivals, and most of the competitor telecoms them even reporting losses in their Q3 (October-December period) financial reports.

In response to this situation, many telcos have been coming up with offers to counter Jio, but most of them have failed. Moreover, telecom giants Vodafone India and Idea Celluar are in talks for a merger.

However, Airtel is still India’s largest telecom operator, having over 269 million subscribers, along with having a revenue market share in excess of 33 percent. The acquisition of Telenor India will garner them more 44 million customers, but more importantly, boost Airtel’s 4G footprint to compete against Reliance Jio.

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