Reliance Jio and Bharti Airtel announced a spectrum trading agreement on Tuesday. Jio has acquired the rights to use Airtel’s 800MHz band in the Andhra Pradesh, Delhi, and Mumbai circles through spectrum trading. The addition of the spectrum rights will help Jio enhance its network capacity and bolster its footprint in the telecom sector. Airtel, on the other hand, will be able to reduce its ongoing financial burden through the amount it will receive from Jio, which is subject to approvals.
Through this deal, Airtel will receive a consideration of Rs. 1,037.6 crores from Jio for the proposed transfer of its spectrum that was not being used. Jio will assume future liabilities of Rs. 459 crores relating to the spectrum.
Jio will receive 2x10MHz of spectrum in the 800MHz band in the Andhra Pradesh and Delhi circles and 2x15MHz of spectrum in the Mumbai circle.
“The sale of the 800 MHz blocks in these three circles has enabled us to unlock value from the unutilised spectrum. This is aligned to our overall network strategy,” said Gopal Vittal, MD and CEO (India and South Asia), Bharti Airtel, in a prepared statement.
An exact timeline on when consumers will receive the benefits of the latest deal is yet to be revealed. Jio said that the trading agreement was following the Spectrum Trading Guidelines issued by the Department of Telecommunications (DoT) and is subject to regulatory and statutory approvals.
The 800MHz spectrum, which was initially used for the rollout of wireline services, has been considered by telecom operators for 4G LTE networks across India. However, operators including Airtel and Vi in recent times had shifted their focus towards newer bands.
Last month, Jio, Airtel, and Vi participated in the spectrum auction and bid for the 800MHz, 900MHz, 1800MHz, 2100MHz, and 2300MHz bands. The Ministry of Telecommunications and Information Technology also put 700MHz and 2500MHz bands for bidding during the last spectrum auction round. Neither of these was picked by any of the four participants.