Bharti Airtel, a telecommunication giant in the country, has recently concluded its spectrum trading deal with Reliance Jio. Both the companies had announced the trading deal earlier this year.
In this deal, Bharti Airtel had agreed to transfer the rights of its spectrum in the 800 MHz band in Delhi, Mumbai, and Andhra Pradesh to Reliance Jio.
The statement released by Bharti Airtel states that Reliance Jio has paid them Rs 1,004.8 crores for the proposed transfer. Reliance Jio has also assumed the future liabilities worth Rs 469.3 crores that are related to the spectrum.
How The Deal Benefits Both The Companies?
The analysts have described it as a ‘win-win’ deal for both companies. While Bharti Airtel can use this money to pay off its upcoming dues installment and also use it to expand and enhance its network, Reliance Jio, with the additional spectrum in the 800 MHz band, will be able to provide better network coverage both indoors and outdoors to its users living in Delhi, Mumbai, and Andhra Pradesh.
Reliance Jio has stated that with this trading of right to use spectrum, RJIL will have 800 MHz band spectrum footprint of 2 x 15MHz in Mumbai circle and 2 x 10 MHz each in Andhra Pradesh and Delhi circles, thereby further enhancing network experience of its customers.
The lower spectrum bands like 800 Mhz and 900 Mhz provide greater indoor coverage, while bands like 2300 MHz or higher frequency bands have superior transmission capability. The airwaves are sold in quantities measured as MHz.
This is the first of its kind deal between the two telecommunication giants.
Bharti Airtel, which had acquired this spectrum from Tata for little consideration. The sale of the 800 MHz blocks in these three circles has enabled Airtel to unlock value from the spectrum that was unutilized.
