How Spectrum Trading Deal With Airtel Is Going To Help Reliance Jio

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Airtel and Reliance Jio have finally concluded their spectrum trading deal on Friday. The closure of this deal will allow Airtel to transfer the Right to use of its 800 MHz spectrum to Reliance Jio. Notably, this deal is designed for three circles.

 
How Spectrum Trading Deal With Airtel Is Going To Help Reliance Jio

Reliance Jio Paid Rs. 1,004.8 Crores To Airtel

 

"Airtel has received Rs. 1, 004.8 crores (net of tax) from Jio for the proposed transfer. In addition, Jio will assume future liabilities of Rs. 469.3 crores relating to the spectrum," Airtel said.

The definitive spectrum trading deal of 800 MHz spectrum will allow Reliance Jio to provide better services in Andhra Pradesh, Delhi, and Mumbai.

"Reliance Jio now topped up its holding in these circles to 10MHz, 10MHz, and 15MHz respectively, for a total consideration of Rs. 14.97 billion. With the remaining validity of 14 years, the implied cost/MHz/annum comes to Rs. 140 million. Jio has therefore not only built up 10-15MHz blocks in these key circles but has potentially saved $400 million," financial firm UBS said.

Airtel recently announced that it is selling 1.25 MHz in Delhi, 3.75 MHz in Andhra Pradesh, and 2.50 MHz in Mumbai. In addition, this deal will Airtel to get rid of that spectrum, which it is not using.

Airtel Is Selling 178.5 MHz Airwaves: Check Details

Airtel is selling that bandwidth, which it has received after buying Tata Group's consumer mobility business. Under the merger, Airtel acquired airwaves in 1800, 2100, and 800MHz bands. Besides, Airtel acquired spectrum in 19 circles.

It is important to note that Airtel has already built a network in the sub-GHz spectrum in the 900 MHz band. On the other hand, the Reliance Jio network is built on an 800 Mhz band, where a majority have been used via Reliance Communications.

For the unaware, Airtel purchased a 355.45 MHz spectrum, which is close to Rs. 18,699 crores. The telecom operator acquired a major part of the 900 MHz band and 16 MHz in 800 MHz in only four circles. Reliance Jio was the only operator that bought spectrum in almost all circles for close to Rs. 57,122 crores.

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