Airtel today announced that it has entered into a definitive agreement with Telenor South Asia Investments Pte Ltd (“Telenor”) to acquire Telenor (India) Communications Private Limited (“Telenor India”). The acquisition is subject to requisite regulatory approvals.
As part of the agreement, Airtel will acquire Telenor India’s running operations in seven circles – Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam. These circles represent a high population concentration and therefore offer a high potential for growth.
The proposed acquisition will include transfer of all of Telenor India’s assets and customers, further augmenting Airtel’s overall customer base and network. It will also enable Airtel to further bolster its strong spectrum foot-print in these seven circles, with the addition of 43.4 MHz spectrum in the 1800 MHz band. Airtel will ensure quality services to Telenor India’s customers, while offering them the added benefits of its innovative product portfolio, access to superior voice & data services, mobile banking, VAS and domestic/ international roaming facilities.
Gopal Vittal, Managing Director and CEO (India and South Asia), Bharti Airtel, said, “The agreement underlines our commitment to lead India’s digital revolution by offering world-class and affordable telecom services through a robust spectrum portfolio spread across multiple bands. On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position in several key circles. The customers of Telenor India will now be able to enjoy India’s widest and fastest voice & data network, and a range of Airtel’s world-class products and services.”
“The acquisition of additional spectrum through this transaction, which made an attractive business proposition, has further enhanced our already solid spectrum portfolio. The proposed transaction will also create substantial long-term value for our shareholders given the significant synergies,” added Gopal.
Sigve Brekke, Chief Executive Officer of Telenor Group, said, “We believe today’s agreement is in the best interest of our customers, employees and Telenor Group. Finding a long term solution to our India business has been a priority for us, and we are pleased with our agreement with Airtel. The decision to exit India has not been taken lightly. After thorough consideration, it is our view that the significant investments needed to secure Telenor India’s future business on a standalone basis will not give an acceptable level of return.”
As the new owner, Airtel will take over Telenor India’s spectrum, licenses and operations, including its employees and customer base of 44 million . Telenor’s operations and services will continue as normal until the completion of the transaction.
The transaction will not trigger any impairment. As of fourth quarter 2016, the remaining value of tangible and intangible assets in Telenor India amounted to NOK 0.3 billion.
According to the agreement, Airtel and Telenor India will merge and Airtel will take over Telenor India as soon as all necessary approvals are received. As part of the agreement, Airtel will take over outstanding spectrum payments and other operational contracts, including tower lease.
The transaction is subject to requisite regulatory approvals, including approvals from the Department of Telecommunications in India (DoT) and the Competition Commission of India. The exposure to claims related to the period Telenor owned the business, will remain with Telenor.
The transaction is expected to close within 12 months. With effect from first quarter 2017, Telenor India will be treated as an asset held for sale and discontinued operations in Telenor Group’s financial reporting.
@Technuter.com News Service