The spectrum was purchased for INR15 billion (US$201.9 million), including future liabilities.
Airtel will transfer 3.75MHz of 800MHz spectrum in Andhra Pradesh (AP), 1.25MHz in Delhi and 2.5MHz in Mumbai to Jio. This takes Jio's spectrum holdings to 10MHz in Andhra Pradesh, 10MHz in Delhi and 15MHz in Mumbai.
Jio had recently purchased 6.25MHz in AP; and 8.75MHz and 12.5MHz in the 800MHz band in Delhi and Mumbai, respectively, with a validity of 20 years. Whereas this cost the company INR135 billion ($1.8 billion), the acquisition from Airtel represents a significant cost advantage.
"With the enhanced spectrum footprint, especially contiguous spectrum, and superior infrastructure deployed, RJIP has further increased its network capacity," says the Jio press release. The deal is subject to regulatory and statutory approvals.
All three are Category-A circles with high revenue potential. The deal will allow Jio to enhance capacity, while Airtel is able to monetize the unutilized spectrum.
Airtel, which uses its own 900MHz spectrum in these circles, had acquired this 800MHz spectrum after the Tata Teleservices acquisition in 2019.
"The sale of the 800Mhz blocks in these three circles has enabled us to unlock value from spectrum that was unutilized. This is aligned to our overall network strategy," said Gopal Vittal, managing director and CEO (India and South Asia), Bharti Airtel, in a statement issued by the company.
It is clearly a win-win deal between the two bitter rivals, and one hopes there will be more such instances of mutual cooperation.
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— Gagandeep Kaur, contributing editor, special to Light Reading