India’s third largest operator Idea Cellular will buy 10MHz of 1.8GHz spectrum in two regions from Videocon Telecom for INR33.1 billion (about $499 million).
The spectrum purchase is intended to boost Idea’s spectrum holding as it gears up to launch 4G service early next year to compete against rivals Bharti Airtel, Vodafone India and new-entrant Reliance Jio.
Videocon, a smaller player with less than a 1 per cent market share, has held talks with a number of operators, including Airtel, Telenor India and Vodafone India, to sell spectrum in six service areas to raise funds. Its finances have been under pressure due to its large debt. Videocon said it will soon announce trading agreements in two additional regions, but didn’t name the partner.
The deal will give Idea 4G spectrum in 12 service areas covering more than 72 per cent of its 166 million connections, The Economic Times reported.
The government approved spectrum sharing guidelines in August and spectrum trading rules in September. A number of operators have already taken steps to share or trade spectrum but, if finalised, the Idea-Videocon deal would be the country’s first official spectrum trading transaction, which requires confirmation from the Department of Telecom.
Reliance Communications (RCom) and Jio were the first to take advantage of the new regulations, announcing plans to share 800MHz spectrum in 10 service areas in August. The next month they entered into a “strategic partnership” to allow trading and sharing of airwaves in the 800-850MHz band, aiding RCom’s 4G offering.
Tata Teleservices announced in early October it was looking to liberalise its CDMA spectrum in at least four regions as it prepares to trade the spectrum, likely with Telenor India, as it gears up to offer 4G services to keep up with rivals.