Idea Cellular has entered into an agreement with Videocon Telecommunications for acquiring the right to use spectrum in Gujarat and Uttar Pradesh (West) for Rs 3,310 crore.
This was in accordance to the DoT “Guidelines for Trading of Access Spectrum by Access Service Providers” which came on 12 October 2015.
This agreement for Idea’s two leadership telecom circles is for 2x5 MHz contiguous blocks of 1800 MHz in each service area, with the right to use spectrum until December 2032.
With this spectrum trading arrangement, Idea’s 4G (LTE) spectrum footprints will expand to 12 service areas covering over 75 per cent of Idea’s current revenue and over 72per cent of existing 170 million subscribers.
The transaction will be effective only after completion of the due diligence related to spectrum, and a written confirmation by the Department of Telecommunications (DoT) on the transfer of right to use spectrum to Idea Cellular.
The effective date of spectrum trading will not be earlier than 45 days from the date of joint intimation, as per the Guidelines.
Along with the right to use spectrum, Idea Cellular will also be taking over the outstanding ‘Deferred Payment Liability’ of Videocon Telecommunications that is payable to the DoT.
These 12 circles currently contribute 60 per cent of the Indian telecom industry mobility revenues. After completion of this transaction, Idea would have full range of services; 2G (GSM), 3G (HSPA) and 4G (LTE) technologies in all of its 8 markets of Maharashtra and Goa, Kerala, Andhra Pradesh and Telengana, Madhya Pradesh and Chhattisgarh, Haryana, Punjab, Gujarat and Uttar Pradesh (West).
As per the latest TRAI Q2FY16 data in these 8 service areas, Idea’s combined revenue market share is 30.3 per cent and subscriber market share (on VLR) is 28.6 per cent.
BW Reporters
Haider Ali Khan is an alumnus of IIMC. He holds a degree in English Journalism from the prestigious campus. His passion includes Aviation, Technology, Politics and Sports.
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