Airtel Acquires Tikona’s 4G Business Amidst Data War; Becomes Stronger 4G Provider In UP, Himachal, Rajasthan & Gujarat

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Airtel Tikona Acquisition

Airtel, which is India’s 2nd biggest telecom player after Idea-Vodafone, is refusing to settle down. In yet another case of telecom consolidation, they have acquired the 4G business of Tikona Digital Networks. As per regulatory filing by Airtel, this acquisition will cost them Rs 1600 crore.

Rumours had emerged last week about a possible acquisition of Tikona’s 4G business by Airtel for Rs 800-1000 crore. Considering that Tikona has some debt on its plate, the final numbers are in the range of Rs 1600 crore.

Airtel will acquire Tikona’s broadband wireless access (BWA) spectrum, besides 350 cellular sites across 5 telecom circles.

Why Airtel Acquired Tikona’s 4G Business?

And the answer lies in data war, Jio rivalry and spectrum issues.

Historically, Airtel has been slow in acquiring spectrum in the bandwidth of 2300 MHz, which actually powers 4G network. And Jio has been a leader in acquiring the spectrum of 2300 MHz bandwidth, pan-India.

In fact, Airtel had no bandwidth in the range of 2300 MHz spectrum in the important markets of UP (West), UP (East), major parts of Rajasthan and some parts of Gujarat. And in the longer run, this was a major gap. In fact, Airtel had none of the 2300 MHz bandwidth in entire UP (east and west) and Rajasthan. Meanwhile, in Gujarat and HP, they had only 10 MHz spectrum in 2300 MHz bandwidth.

On the other hand, Tikona, which is a smaller company, had made a wise decision of buying 20 MHz in the 2300 MHz spectrum bandwidth during 2010 spectrum auctions. And these airwaves were located in UP (West), UP (East), Gujarat and Rajasthan.

Although Tikona had earlier announced to launch their own 4G services across 30 cities, they couldn’t go beyond Varanasi, where they are running a pilot project.

The dots got connected, and Airtel acquired Tikona’s 4G business, basically for grabbing those precious 20 MHz 4G airwaves in the 2300 MHz spectrum.

Airtel Will Now Become Stronger In UP, HP, Gujarat & Rajasthan

Post-acquisition, Airtel’s position has now become much stronger in the crucial, heavily populated areas of UP (East), UP (West), Himachal Pradesh, Rajasthan and Gujarat. As per Airtel’s statement, they will now have 30 MHz spectrum in 2300 MHz bandwidth in each of these states, thereby consolidating their position in the 4G market.

Last month, Airtel had acquired Telenor for strengthening their 1800 MHz bandwidth. Interestingly, even Vodafone was trying to acquire Tikona’s 4G business, for the very same reason. However, they ended up buying YOU Broadband, as the negotiations with Tikona failed to materialise.

Now, Airtel has ownership of 30 MHz spectrum in 2300 MHz bandwidth across 13 circles, which means that their network capability and data speed, both will be top notch.

And they are not wasting any time. They said, “Airtel plans to roll out high-speed 4G services on the newly acquired spectrum in the five circles immediately after the closure of the transaction..”

Telecom users are now, of course, spoilt with choices: While Jio is coming up with excellent plans and offers under their Prime scheme, Vodafone-Idea merger may bring out even more interesting plans; and BSNL is already there with 2 GB per day plans.

May the best player win the game!

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