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Business News/ Industry / Telecom/  Airtel acquires Augere Wireless in 4G push
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Airtel acquires Augere Wireless in 4G push

The acquisition gives Airtel the right to use 2300MHz spectrum in a total of nine circles

Airtel has already rolled out its 4G services in more than 300 cities. Photo: Pradeep Gaur/MintPremium
Airtel has already rolled out its 4G services in more than 300 cities. Photo: Pradeep Gaur/Mint

New Delhi: Bharti Airtel Ltd has bought a company that owns 4G spectrum in Madhya Pradesh and Chhattisgarh, adding to the arsenal that India’s biggest mobile phone services provider is building to take on billionaire Mukesh Ambani’s telecom venture in the looming battle for India’s high-speed wireless data market.

Bharti “has signed a definitive agreement to acquire 100% equity stake in Augere Wireless Broadband India Pvt. Ltd. which holds 20 MHz (megahertz) of BWA (broadband wireless access) spectrum in the telecom circle of Madhya Pradesh and Chhattisgarh," Airtel said in a statement on Wednesday. The company didn’t disclose the value of the transaction.

The acquisition gives Bharti Airtel the right to use 2300MHz spectrum in a total of nine circles, crucial at a time when telecom service providers are preparing for the launch of high-speed data services from Reliance Jio Infocomm Ltd, the only one of six companies that successfully won 2300MHz spectrum across India in a 2010 auction.

The others include Airtel (four circles), Qualcomm (four), Tikona (five), Aircel (eight) and Augere in the Madhya Pradesh circle. Airtel acquired Qualcomm’s circles in 2013.

Analysts estimate Airtel may have spent about 130 crore to buy Augere.

“Augere bought the spectrum for 125 crore ( 124.6 crore) five years ago. Since it has a validity of 15 more years, the value would be around 100 crore. Taking into account the interest rate and some goodwill, the amount will not be more than 130 crore," said a Mumbai-based telecom analyst with a multinational brokerage firm.

“They are seeing a lot of traction in their 4G services. It not only gives them a significant advantage over the 3G operators like Idea Cellular Ltd and Vodafone India Ltd, in the region, but also access to around 10-15% of the current data revenue in the country," he added, requesting anonymity.

Airtel has already rolled out its 4G services in more than 300 cities. Reliance Jio is expected to start commercial services in December, and in the last five years, has spent more than $15 billion in its soon-to-be-launched services—an amount similar to what the incumbents have invested in 20 years.

Ambani, at his company’s annual meeting on 12 June, announced that the company will be present across all 22 circles, across 18,000 towns and cities, when it starts services.

Vodafone and Idea have said that they are testing their 4G networks (on 1800MHz spectrum) using the FD-LTE (frequency duplex) variant of LTE, and are expected to start rolling out their services by the end of the financial year.

The Madhya Pradesh and Chhattisgarh circle’s data market is estimated to be valued at around $200 million now, but is expected to grow exponentially, along with the rest of the country. Currently, the Indian data market is valued at around $4 billion.

Augere was expected to roll out services in 2012, two years after acquiring the spectrum, but was unable to do so after a Supreme Court ruling made it difficult for the company to raise funds. In February 2012, the apex court cancelled the 2G spectrum and licences granted in 2008 on grounds that the allotment was “unconstitutional and arbitrary".

The 2010 auction was the first time the Indian government auctioned spectrum, in the 2100MHz and 2300MHz bands needed for 3G and 4G services, respectively. The 2300MHz spectrum is best suited to enable the telcos to offer TD-LTE (time duplex-long term evolution) variant of 4G mobile technology, that allows speeds of around 40 Mbps wirelessly.

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Published: 26 Aug 2015, 07:41 PM IST
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