Bharti Airtel will acquire the local unit of Norwegian operator Telenor ASA, in the latest consolidation move in India's telecom sector triggered by the entry of Reliance Jio Infocomm Ltd.
The acquisition will help Bharti strengthen its market leadership position in the wake of growing threat from Reliance Jio and the proposed merger of the second- and third-largest players – Vodafone India Ltd. and Idea Cellular Ltd.
Bharti Airtel will acquire Telenor (India) Communications Pvt. Ltd.'s operations in seven telecom service areas, namely, Andhra Pradesh, Bihar, Maharashtra, Gujarat, eastern and western Uttar Pradesh, and Assam. Bharti will not pay any cash to Telenor and estimates the spectrum payments to be around 1600 crore. Telenor India has borrowings of about 1500 crore but it could not be immediately ascertained if Bharti will take on this debt.
The acquisition will also bolster Bharti Airtel's holdings of airwaves with the addition of 43.4 MHz spectrum in the 1800 MHz band.
The acquisition is subject to regulatory approvals, including from the Department of Telecom and the Competition Commission of India. The companies expect the deal to complete within 12 months.
For Telenor, the deal will help it exit a market where it never managed to establish a strong foothold despite pumping millions of dollars since its entry in 2008 in a tie-up with real estate firm Unitech Ltd.