New Delhi: Sunil Bharti Mittal-led Bharti Airtel Ltd announced on Tuesday that it would acquire Khaitan family-owned Loop Mobile for an undisclosed sum.
Senior officials requesting anonymity, however, said the transaction would be valued at around Rs.700 crore, including Rs.400 crore of debt the Mumbai operator had on its books.
“Under the agreement, Loop Mobile’s three million subscribers in Mumbai will join Airtel’s over four million subscribers,” a statement from Bharti Airtel said. The transaction also includes Loop’s 2G-enabled network supported by 2,500 plus cell sites, and Airtel’s 2G and 3G network supported by over 4,000 cell sites in the Mumbai circle.
The two companies will start integration of their businesses once definitive agreements are signed, the statement said, adding that the deal was subject to regulatory and statutory approvals.
Loop, formerly BPL Mobile, operates only in Mumbai and is one of the oldest telecom firms in India, with operations in one of the most lucrative markets in the country. Its purchase would enable Bharti Airtel to surpass Mumbai market leader Vodafone India Ltd in terms of customer numbers, although not by revenue.
Loop Mobile, whose licence expires in September, did not participate in the recently concluded telecom auction making it impossible for the company to continue operations. It is understood that Bharti Airtel picked up the operator’s spectrum in Mumbai in the auction for around Rs.2,000 crore.
Loop has also filed a petition seeking international arbitration against the government over the cancellation of its licences in the 2012 Supreme Court judgement under the bilateral trade agreement between Mauritius and India.