Bharti Airtel to finalise Telenor acquisition by end-Feb in fight against Rel Jio
Bharti Airtel, the largest telecom company in India, is in final stages of discussion with Norwegian telecom operator Telenor to acquire its local unit, sources confirmed HT.business Updated: Jan 19, 2017 17:03 IST
As competition from Mukesh Ambani-led Reliance Jio increases, Bharti Airtel, the largest telecom company in India, enters final stages of discussion with Norwegian telecom operator Telenor to acquire its local unit, sources confirmed HT.
The sources added that the deal will be finalised by the end of February, and that Airtel is a stronger negotiating position.
Telenor, on the other hand, has been scouting for a buyer for a long time. It was also in talks with Idea Cellular, HT had reported earlier. The discussion has been called off, and Telenor is only pursuing discussions with Airtel.
Airtel officials did not respond to calls for comments on the story. Telenor, too, didn’t take calls.
However, industry sources said that “much of the decision on Telenor will be taken on January 24 -- the day the Airtel board is meeting for its third quarter results.”
It has been earlier reported by a financial daily that if Airtel goes ahead with the Telenor acquisition, it will have to take an additional debt burden of Rs 1,500 crore.
Telenor was one of the six telecom companies who were given spectrum in 2008. The handing of licences later on led to the infamous 2G scam, where the Comptroller and Auditor General of India pegged loss of Rs 1,76,000 crore to the national exchequer.
Eventually, Telenor, which initially aimed to become a pan-India telecom operator reduced its circles, and even closed some, after it was forced to participate in fare auctions.
Telenor is present in seven circles, and has 54 million subscribers -- most of them yield low average revenue per user. Signalling its intention to exit India, Telenor marked down the value of its local business by Rs 5,000 crore in 2016, and it did not participate in the October auctions.
All these put together, experts said, gives Airtel higher negotiating power. “Airtel can decide if it wants to pay for the subscriber, or towers, or the spectrum, or all of them,” said sources.