Bharti Airtel’s long-awaited acquisition of Telenor India was completed after receiving final regulatory approval, making way for the market leader to expand both its subscriber base and, more importantly, spectrum holding.
The Department of Telecommunications (DoT) said it approved the deal and transferred all of Telenor India’s 4G licences, along with its liabilities, to Airtel, The Economic Times (ET) reported. The unit of Norway-based Telenor held 43.4MHz of 1.8GHz spectrum in seven service areas.
Airtel said the acquisition received all regulatory approvals and the next step is to start integrating Telenor India’s operations across the seven telecoms circles.
Telenor CEO Sigve Brekke confirmed in a tweet the transaction to transfer ownership of Telenor India to Airtel was formally completed after regulatory approvals.
Today the transaction between @TelenorGroup and Bharti Airtel @airtelnews to transfer ownership of @TelenorIndia has been formally completed after regulatory approvals. Grateful to have been able to work with great colleagues in @TelenorIndia, who have inspired all of us. pic.twitter.com/KpzjDNEssF
— Sigve Brekke (@Sigve_telenor) May 14, 2018
The approval comes just days after the country’s Supreme Court dismissed an effort by the DoT to require Airtel to provide a bank guarantee of INR15 billion ($222 million) as a condition for approving the market leader’s bid.
To approve the buyout, DoT asked Airtel to provide a bank guarantee equal to one-time charges for spectrum allocated without an auction and pay more than INR2 billion for deferred payment for spectrum owed by Telenor India, but the Telecom Disputes Settlement and Appellate Tribunal turned down the request. Airtel paid the INR2 billion for Telenor’s spectrum.
Airtel will take over Telenor India’s 38 million mobile connections, giving it a total of about 340 million connections and a market share of 28 per cent (up from its current 25 per cent), data from GSMA Intelligence showed.
Job cuts coming
A source told ET Airtel “is very unlikely to fully absorb Telenor India’s near 1,200-odd staff”.
In response, an Airtel representative told the newspaper: “Airtel has already on-boarded 700 employees from Telenor India. The plan for the remaining employees will be communicated in due course.”
Airtel agreed to acquire Telenor India in February 2017.
The acquisition is aimed at boosting Airtel’s ability to compete against rival Reliance Jio which launched nationwide 4G service in September 2016 and has disrupted the market with free and low-cost voice and data plans. Airtel reported a profit drop of 77.8 per cent in its fiscal Q4 2017 to INR830 million, with revenue falling 10.5 per cent to INR196.34 billion from INR219.35 billion.