Bharti Airtel buys Tikona’s 4G business for Rs.1600 cr

The Dollar Business Bureau

Telecom major Bharti Airtel Ltd has acquired the 4G business of Tikona Digital Networks for Rs1,600 crore, to ramp up its capacity of a high-speed broadband spectrum to take on Vodafone-Idea Cellular and Reliance Jio Infocomm in a highly competitive telecom market which is witnessing rapid consolidation.

The deal, which was announced just a few days after the merger of Vodafone and Idea, will give an edge to Bharti Airtel as the largest telecommunications company in India. Through this deal Bharti can gain access to Tikona’s 4G airwaves in five states of Gujarat, UP (West), UP (East), Rajasthan and Himachal Pradesh. 

This will also bridge the gap between Bharti Airtel's pan-India 4G capacity and Reliance Jio and Vodafone-Idea's, but there will still be a significant difference.

It should be mentioned that Bharti Airtel had won the 4G spectrum in only 4 circles out of 22 in the auctions held in 2010. Since then, Bharti has followed a strategy of acquiring companies with 4G airwaves with Tikona being its 5th acquisition.

Bharti Airtel is engaged in a cut-throat competition with Reliance Jio that has disrupted the data and voice market with its rock bottom prices. Now it also has to reckon with a combined Vodafone-Idea.

"We believe that combining our capacities in TD-LTE (2300 MHz) and FD-LTE (1800 MHz) will further bolster our network and help us provide unmatched high-speed wireless broadband experience to our customers," said Gopal Vittal, MD (India and South Asia), Bharti Airtel, in a statement.

The deal with Tikona includes taking over its debt of Rs.500-600 crore. In the process, Bharti Airtel will get 100 MHz of 4G airwaves in the 2300 MHz (4G) band divided equally across five 4G circles and take the company’s overall 4G holding to nearly 880 MHz (that also includes Telenor India), against the 1,169 MHz of Reliance Jio and 1,089 MHz of Vodafone-Idea.

The deal, in addition, will get Airtel 350 cell sites in Tikona’s five circles but it will not take over Tikona's employees.

Tikona was established in 2008 by former executives of Reliance Communications - Prakash Bajpai and Rajesh Tiwari. The company's investors include Oak Capital, IFC, Goldman Sachs and Everstone Capital. Tikona will keep its business of home broadband wireless.