Airtel on Thursday struck a Rs 4,428-crore deal to buy Videocon Telecom’s spectrum in six regions a day after idea Cellular called off a pact for the same spectrum in two circles. In a bid increase net work coverage Bharti Airtel will buy 1,800 megahertz band spectrum from Videocon in Bihar Haryana, Madhya Pradesh, Uttar Pradesh (East and West) and Gujarat.
The deal came close on the heels of idea last night announcing calling off its November pact to buy Videocon’s airwaves in Gujarat and UP (West) for Rs 3,310 crore.
The deal with Videocon will help Airtel strengthen its footprint in 4G space ahead of the launch of Reliance Jio’s fourth-generation wireless services later this year.
“Bharti Airtel has entered into a definitive agreement with Videocon Telecommunication of Rs 4,428 crore rights to use 285 MHz spectrum in 1800 MHz band for six circles,” he company said in a BSE filling. The closing of the transaction is subject to satisfaction of standard conditions.
Announcing the Budget Finance Minister Arun jaitley has clarified that right to use spectrum and its subsequent transfer is a service which will attract the Service Tax.
Airtel will b buying spectrum for Bihar, Haryana, Madhya Pradesh, UP (East), UP (West) and Gujarat, Videocon had won spectrum in these six circles in the 2012 ,auctions for Rs 2,221.44 crore. The spectrum is valid up to December 18 2032 Post the deal. Airtel 4G foot pint will increase to 19 circles from the current 15. The deal comes ahead of Mukesh Ambani-owned Reliance Jio’s launching commercial 4G services got pan-India 4G spectrum and has already launched service which will attract the Service Tax.
