India is in the grip of a wave of mobile operator consolidation, as MNOs race to fend off the challenge from newcomer Reliance Jio, and to build the scale to achieve viable economics in their tough market. Following Vodafone’s announcement of plans to merge with Idea Cellular, current market leader Bharti Airtel has unveiled a deal of its own, albeit it a far smaller one. It will acquire Tikona Digital Networks’ 4G business, including its broadband wireless access (BWA) spectrum and 350 sites in five of India’s 22 telecoms operating circles.
Tikona currently has 20 MHz of spectrum in the 2.3 GHz band in the circles of Gujarat, Uttar Pradesh (east and west), Rajasthan and Himachal Pradesh. Airtel said it will deploy 4G services on its new spectrum in these regions immediately after the closure of the transaction, which will require regulatory approval, but should come well before the Vodafone/Idea deal is finalized, robbing Bharti of its mobile leader’s crown.
“The proposed acquisition will enable Airtel to fill BWA spectrum gaps in the 2300 MHz band in Rajasthan and Uttar Pradesh, thereby securing a pan-India footprint in the band,” the operator announced in a statement. “Post completion of the deal, Airtel will have 30 MHz in the 2300 MHz band in 13 circles giving it tremendous advantage to handle the surging data demand.”
This unpaired BWA spectrum has moved to the center of the competitive landscape because it is the key weapon of new entrant Reliance Jio, which is the only operator to have secured nationwide licences in this band. As the BWA auction followed immediately after the main Indian 3G auction, most MNOs were financially constrained from spending heavily on the first release of 4G airwaves. This allowed ISP Infocomm to secure national rights, and it was promptly acquired by Reliance Industries, as the basis of its re-entry into the telecoms space. Under its Reliance Jio brand, it has now launched 4G-only services with aggressive introductory marketing tactics including free data.
However, Reliance Jio still has less spectrum in other bands than its rivals, despite purchasing more licences in later auctions and engaging in network sharing deals. Airtel can combined paired and unpaired assets, and in future refarm 2G and 3G spectrum, to bolster its LTE arsenal. Gopal Vittal, MD and CEO for India and South Asia at the company, said: “We believe that combining our capacities in TD-LTE and FD-LTE will further bolster our network, and help us provide unmatched high speed wireless broadband experience to our customers.”
According to local newspaper reports, Vodafone attempted to acquire Tikona’s 2.3 GHz spectrum in December 2015, but was unsuccessful, and went on to buy cableco You Broadband instead, to boost its fixed line activities. Tikona had planned to provide 4G broadband services in the first half of 2016 in 30 cities, but these plans were abandoned.