700 Cr Loop Acquisition By Airtel Goes South. Loop Customers Left In Lurch
In February this year, Airtel announced that they will be acquiring Loop Mobile and their subscribers for roughly Rs. 700 Crore (according to media reports). However, 8 months into the announcement, the deal has gone south and Airtel seems to called off its plans to acquire Loop Mobile, as the deal failed to secure regulatory approvals.
Loop Mobile and their customers are now completely left in lurch, because Loop Mobile’s license is expiring on November 29th, and there is no way Loop can come up with any other deal in this short time. It seems to be the end of road for them.
According to Hindu BusinessLine, Loop Mobile’s India COO Surya Mahadevan said that the approvals for this deal from relevant authorities is still awaited and due to this delay Airtel has withdrawn from the proposed acquisition causing huge losses to the company.
Earlier, when the acquisition was announced, Loop has decided to migrate all their customers to Airtel network. To ensure smooth transition of their subscribers, Loop had also applied for additional porting codes. however, with this new development all plans of migration have been halted.
If the transition of subscribers had happened, Airtel would have gone on to become Mumbai’s largest telecom operator with 7 million subscribers.
Loop has not way forward as they had not renewed their license earlier and cannot operate in any circle after expiry of their license.
Ironically, Loop was Mumbai’s oldest telecom operator and has now also become the first mobile operator in India to close down their business.
In our view, it is really sad state of affairs that regulatory approvals have taken such a long time which has led to demise of Loop and will probably cause lot of problems to their subscribers. While we are not privy of the reasons why the approvals have taken so long, the blame squarely lies on the our regulatory framework.
What is your take?