Aditya Birla Group company Idea Cellular Ltd on Tuesday bought Videocon Telecommunications Ltd’s spectrum in the Gujarat and Uttar Pradesh circles for Rs 3,310 crore.
Idea is confident that with the expansion of its spectrum portfolio it will be able provide more and better services to its 170 million consumers, the company said in a statement. “With robust cash flows and excellent track record of execution, the brand will be able to profitably monetise the opportunities in mobile broadband across 3G and 4G platforms and emerge even stronger.”
This is the second major merger and acquisition in telecom sector after the government released its new spectrum sharing and trading norms. The first was Reliance Communications’ acquisition of 10% stake in Sistema Shyam Teleservices’ Indian operations earlier this month.
“It has been long awaited...it is a good transaction for Idea. Spectrum which is unused is being traded. Directionally it is good for the sector. Now it is for the government to clear these agreements,” said Prashant Singhal, global telecommunications leader at research and analysis firm EY.
This will also help Idea launch its 4G services quickly. “4G services will be launched in 10 circles before the end of current financial year in 750 locations in south and west India,” sources in Idea said.
“This will help customers get better quality of service. In any circle India will have 6-7 operators. Customers will have a better choice when it comes to data services,” Singhal said.
This deal involves transaction of spectrum in the 1,800-MHz band. Idea will have the right to use the spectrum until December 2032.