In the first tranche of the transaction, in May 2012, Airtel acquired 49% stake at 60% discount to the Spectrum Price of Rs 4,911 Crore. Earlier this year, Airtel raised its stake to 51%.
Today Airtel has announced that it will acquire further 42.45% stake at Rs 875 Crore from Qualcomm which will be at a discount of ~58% on a pro-rata basis just valuing the cost of spectrum in the company. Does this mean that if the Government were to Auction 4G LTE Spectrum today in 2.3 GHz, would it sell at a 50% discount to 2010 prices reflecting the paralyzed Indian economy and the most scam scarred Government under the most inefficient Prime Minister of India ?
Qualcomm will be left with residual 6.55% stake in the company. Some aspects of the deal like CAPEX in these circles, DoT payments, etc are not clear though Airtel has ranked in the Transparency report, the biggest irony of the day!
Our sources in the DoT inform us that Airtel has started lighting 4G LTE towers in the Delhi NCR and Mumbai. We expect Airtel to launch 4G LTE services in two of the densely populated broadband hungry markets anytime before the end of 2013.
Airtel said that it has completed the acquisition of 100% equity shares of Wireless Business Services. Pursuant to this, Wireless Business Services has become a wholly owned subsidiary of the company.