Reliance Jio Buying Spectrum From Rival Bharati Airtel Is A Win-Win Deal

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In what can only be called an unlikely deal between two rivals, Reliance Jio will be acquiring some spectrum from Airtel!

India’s largest telecom operator, owned by Mukesh Ambani, Reliance Jio has signed an agreement with Bharati Airtel to acquire the ‘Right to Use’ some of the latter’s spectrum in 800 MHz in Delhi, Mumbai and Andhra Pradesh region. The deal for the right to use this spectrum has been valued at around Rs 1,497 crores.

In a statement announcing the deal, Bharati Airtel mentioned that they will receive Rs 1,037.6 crores from Jio post the fruition of the deal. And in addition, Jio will be assuming all the future liabilities of Rs 459 crores related to the spectrum.

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Reliance Jio Infocomm will be transferred the ‘Right to Use’ of Airtel’s 800 MHz spectrum in Andhra Pradesh (3.75 MHz), Delhi (1.25 MHz) and Mumbai (2.50 MHz) after the deal receives statutory nod from the required bodies.

It is important to note here that the deal between the two rivals in the Indian telecom space is being claimed to be a win-win situation by both Reliance Jio and Bharati Airtel.

Gopal Vittal, CEO and MD of Bharati Airtel (India and South Asia), said that the sale of 8- MHz blocks in the three circles will enable them to unlock value from the spectrum, which otherwise was unutilised. Therefore the deal is well aligned with their overall network strategy.

And, Jio has said that the spectrum’s acquisition will lead to further increasing its network capacity and enhancing its spectrum footprint across India.

All in all, it is well understood that though the proposed deal will work out in favour of both the telecom rivals, it is Reliance Jio that stands to benefit the most out of it.

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It is a no-brainer that Ambani’s telecom, with increased coverage, will be able to accelerate the acquisition of more users. Currently, Reliance Jio has a 410.73 million user base, whilst Bharati Airtel has a user base of 344.60 million.

Despite being a late entrant in the Indian telecommunications space, Reliance Jio managed to leapfrog giants such as Vodafone Idea and Bharati Airtel within four short years. And now with the announcement of the latest deal, it seems like Jio’s thirst for aggressive growth has not yet been quenched.

In closing, it is also important to note that both Airtel and Jio are also actively looking to make progress when it comes to rolling out 5G in India as soon as possible.

Bharati Airtel, two months ago, announced that they successfully conducted on-field trials in Hyderabad to establish the ability to launch the 5G network. Thus, it became the first telecom service provider to demonstrate its fifth-generation network capability before the rollout of the service country-wide.

And in July last year, Mukesh Ambani, Chairman of Reliance Industries Ltd, claimed that they have built an indigenous 5G solution and that Jio will be ready to launch their 5G service by H1 2021. But since then, it didn’t share any updates about its progress.

It now remains to be seen who will finally be crowned the title of ‘King of Indian Telecom’. We will keep you updated on all future developments. Until then, stay tuned.

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