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Airtel Gets 4G Ammunition With Augere Acquisition

Gagandeep Kaur

Bharti Airtel, India's largest telecom operator, has signed a definitive agreement to take full ownership of Augere Wireless as it looks to build up its 4G capabilities.

In 2010, Augere paid around 1.2 billion Indian rupees ($18.5 million) for 20 MHz of spectrum in the 2.3GHz frequency band in Madhya Pradesh-Chhattisgarh circle, subsequently announcing it had hired Sweden's Ericsson AB (Nasdaq: ERIC) to build its 4G network. The company had originally aimed to launch 4G services as far back as 2011 but those plans never came to fruition, possibly because the business case for launching 4G services in a single circle did not stack up.

Indeed, with just one circle under its belt, Augere always looked to be a ripe takeover target. The fact that it never participated in any further spectrum auctions also indicated it would never have an extensive network in India unless bought by a rival.

Bharti Airtel Ltd. (Mumbai: BHARTIARTL)'s acquisition should give it some 4G ammunition it can use in its battle against Reliance Jio, a 4G player set to launch services in December this year. Having initially acquired 2.3GHz spectrum in the four circles of Maharashtra, Karnataka, Kolkata and Punjab, Bharti Airtel subsequently bought licenses from Qualcomm Inc. (Nasdaq: QCOM) covering the service areas of Kerala, Haryana, Delhi and Mumbai. Following the Augere acquisition, the operator has 2.3GHz spectrum in a total of nine circles. (See RJio to Launch 4G in December.)

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The move for Augere also suggests Bharti Airtel might be on the prowl for other assets that would boost its 2.3GHz spectrum portfolio. Possible targets could include Aircel Ltd. , which holds 2.3GHz licenses in eight circles, and Tikona Digital Networks Pvt. Ltd. , which has 2.3GHz spectrum in five.

Even with these deals, however, the operator would look a poor match for RJio, which has secured a 2.3GHz license covering the entire country.

That said, Bharti Airtel has other spectrum assets it can use to support its rollout of mobile broadband services. It has also already taken a head start over RJio in India's 4G market, having launched services in 296 towns across 14 circles earlier this month. The 4G race is on.

– Gagandeep Kaur, contributing editor, special to Light Reading

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