Bharti Airtel has sealed a deal with BWA Spectrum Owner – Qualcomm & Tulip Telecom. According to the Deal, Airtel will have 49% interest in the Venture which has BWA 4G LTE spectrum in Delhi, Mumbai, Haryana and Kerala Circles.
Airtel will shell out mere $165 Mn [Rs 908 Cr ] for the 49% stake. Airtel will also have the obligation to rollout services in these 4 circles and eventually own the entire operations by 2014.
Airtel has already launched 4G services in Kolkata and Bengaluru and within the next few days will rollout in Pune and Chandigrah. So with Delhi and Mumbai 4G services into Airtel’s pocket, it is clearly ahead of over-hyped Mukesh Ambani’s Reliance Infotel 4G Broadband Venture.
What is the Valuation of 4G BWA Spectrum ? Qualcomm, GHCL & Tulip have jointly paid Rs 4900 Cr for the Spectrum. Tulip Telecom and GHCL are both out of the Venture. It is complicated to calculate the valuation as Qualcomm cleared Tulip’s dues with DoT of Rs 410 Cr and sure that has been taken into consideration before letting it off the hook. Going by just what Airtel has paid, the company got a deal because 4G BWA Spectrum is valued at a discount of 60% for now 🙂 CAPEX costs are to be borne by Airtel.
Mukesh Ambani, I’ve already told you a year ago and repeat it again – Today’s Telecom Business is all about Partnerships so time to rework on your strategy as you have not even taken off the ground.
Airtel’s 3G and 4G spectrum across the largest 18 circles, crucially increasing spectrum across bands in the Metros (all 900/1800, 2100 and 2300MHz for 2G, 3G and 4G).
In a liberalized world, Airtel’s ability to provide a robust coverage with superior fall backs from 2.3GHz will be better than that of Reliance.