The deal, announced a few days after Vodafone and Idea said they were merging their businesses to create a company that will replace Bharti Airtel as India's largest telco, gives the Sunil Mittal-led company access to Tikona's 4G airwaves in five circles - Gujarat, UP (East), UP (West), Himachal Pradesh, and Rajasthan.
Rajesh Tiwari, one of the cofounders of Tikona, though sought to put a spanner in the deal, slapping a legal notice against both the companies for not providing details of how the proceeds will be split among shareholders. He has said the deal should not go ahead until there was clarity about his entitlements and his interests were protected. Tiwari owns just over 1 per cent in the Mumbai-based Internet services provider.
Bharti Airtel had bagged 4G airwaves in only four of the 22 circles in the 2010 auctions.
Bharti Airtel has subsequently followed a strategy of buying out companies with 4G spectrum and this is the fifth such acquisition since 2015. It had acquired more airwaves in the 4G auctions that took place last year. Airtel is engaged in a fierce battle with Reliance Jio, which has disrupted both the voice and data markets with rock bottom rates, and it now also has to reckon with a united Vodafone-Idea combine.
The Tikona deal, which includes taking on debt of Rs 500-600 crore, will see Airtel net 100 MHz of 4G spectrum in the 2300 MHz (4G) band equally split across the five circles, taking its total 4G holding to close to 880 MHz (including Telenor India), compared with 1,169 MHz for Jio and 1,089 MHz for the Vodafone-Idea combine. It will also get 350 cell sites in those five circles but won't take on any employees of Tikona.
Tikona was founded in 2008 by former Reliance Communications executives Rajesh Tiwari and Prakash Bajpai. Its other investors include Goldman Sachs, Oak Capital, IFC and Everstone Capital. The company will retain its home broadband wireless business.
The acquisition is subject to requisite regulatory approvals. The deal is valued at 16 billion rupees ($244.20 million), as per a Reuters report.
"Airtel’s continued focus on strengthening its 4G capabilities across multiple spectrum bands will be complemented with the BWA spectrum acquisition from Tikona. We believe that combining our capacities in TD-LTE and FD-LTE will further bolster our network, and help us provide unmatched high-speed wireless broadband experience to our customers. We remain committed to our vision of leading India’s digital revolution by offering world-class and affordable telecom services through a robust spectrum portfolio spread across multiple bands," Gopal Vittal, MD & CEO (India & South Asia), Bharti Airtel, said in a statement.
source:Economics times
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