Airtel Acquires Tikona to Fill 4G Gaps

Bharti Airtel, India's largest service provider, has announced its second takeover deal in the last two months with a move for smaller spectrum and site equipment owned by small rival Tikona.

Coming shortly after Bharti Airtel Ltd. (Mumbai: BHARTIARTL) flagged plans to acquire smaller rival Telenor India, the Tikona deal will give it 20MHz of 2.3GHz spectrum in the five circles (service areas) of Gujarat, Uttar Pradesh (East), Uttar Pradesh (West), Rajasthan and Himachal Pradesh. Airtel will also take over Tikona's networks in those circles. (See Airtel to Acquire Telenor in India.)

The deal seems aimed at plugging gaps in Airtel's 4G coverage -- in Uttar Pradesh (both East and West) it lacks any 4G spectrum whatsoever -- and the operator is planning on rolling out 4G services immediately after the transaction closes, according to its press release.

Like other M&A activity in the Indian market, the Tikona deal looks to have been prompted by the activities of Reliance Jio , India's newest operator, which launched 4G services in September last year.

Predatory pricing by Reliance Jio triggered a big drop in Airtel's sales and profits last quarter, and the cut-throat levels of competition have been threatening the survival of smaller players, a number of which have now been swallowed up in takeover deals.

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While the financial details of the Tikona acquisition were not revealed in the press statement, Indian press media reports have valued the deal at between 8 billion Indian rupees ($122.16 million) and INR10 billion ($152.69 billion).

"Airtel's continued focus on strengthening its 4G capabilities across multiple spectrum bands will be complemented with the BWA [broadband wireless access] spectrum acquisition from Tikona," said Gopal Vittal, the managing director and CEO of Airtel's Indian and South Asian businesses.

— Gagandeep Kaur, contributing editor, special to Light Reading

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