Reliance Jio Infocomm Ltd (RJIL) has announced the acquisition of 800MHz spectrum band rights in Andhra Pradesh, Delhi, and Mumbai circles, at an aggregate value of Rs. 1497 crores. The addition of the spectrum rights will help Jio enhance its network capacity and bolster its footprint in the telecom sector, which is swelling due to the increased data usage in the country. Airtel, however, is ready to cut back its ongoing monetary burden with the help of this spectrum settlement with this first ever deal between the two telecom giants.
Through this deal, Airtel, India’s second-largest telecom player, will receive around Rs. 1000 crores from Jio, for the proposed transfer of its spectrum, that was not being used. Jio will see future liabilities of around 450 crores relating to the spectrum. Jio will receive 2x10MHz of spectrum in the 800MHz band in the Andhra Pradesh and Delhi circles, and 2x15MHz of spectrum in the Mumbai circle. “The sale of the 800 MHz blocks in these three circles has enabled us to unlock value from the unutilized spectrum. This is aligned to our overall network strategy,” said Gopal Vittal, MD and CEO, Bharti Airtel.
Last month, Jio, Airtel, and VI participated in the spectrum auction and bid for the 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, and 2300 MHz bands. These Airwaves come in different bands which support different propagation characteristics for the transmission of voice and data. For instance, lower bands like 800 MHz and 900 MHz support good indoor coverage, while higher bands like 2300 MHz have a good carrying capacity. The airwaves are also sold in quantities measured as MHz. Currently, most of the major telecom operators spend more on 800 MHz, while Billionaire Mukesh Ambani’s Reliance Jio spends the highest for all bands to get an edge in the market.
The Ministry of Telecommunications and Information Technology also put 700MHz and 2500MHz bands for bidding during the last spectrum auction round. The first 800 MHz spectrum, which was initially used for the rollout of their network services, has been considered by telecom operators for 4G LTE networks across India. However, operators including Airtel and VI in recent times had shifted their focus towards newer bands.
The whole settlement between Reliance Jio and Bharati Airtel is subject to approvals. The trading agreements in the telecom sector require approval from the Department of Telecommunication (DoT). Jio in its statement, said that this deal is in accordance with the Spectrum Trading Guidelines, issued by the Indian regulatory body and is subject to regulatory and statutory approvals. Hence, an exact timeline on when all the consumers of Reliance Jio will obtain the benefits of the recent deal is yet to be revealed depending upon the final approval.
