Recently, the Jio-Airtel Spectrum deal took place where Bharti Airtel Ltd sold airwaves in the 800MHz band to a well-known company named Reliance Jio Infocomm Ltd for ₹1,037.6 crores. Jio also decided to take up future liabilities of ₹459 crores concerned to the spectrum.
This spectrum deal expects to benefit both the companies in Delhi, Andhra Pradesh, and Mumbai. With the entry of Reliance Jio’s entry, somehow it upended the Indian telecom industry. The Reliance Jio Company introduced free voice calls and cut-rate data services in 2k16, prompting a tint price war that funded rivals reporting mounting debt and sharp losses.
Understand How Reliance Jio Gets Benefitted From This Deal
The Jio-Airtel spectrum deal will not only help Reliance Jio in building its capacity in Delhi, Andhra Pradesh, and Mumbai which is 17% of its gross revenues but also save 50% of the total cost in buying airwaves in a government auction.
Reliance Jio only provides 4G wireless services by using 800MHz. According to USB, “Jio through the deal with Airtel, has topped up its holding in these circles to 10MHz, 10MHz and 15MHz, respectively, for a total of ₹1,497 crores. With remaining validity of 14 years, the implied cost/MHz/annum comes to ₹14 crores, a 50% discount to the auction price.”
How Jio-Airtel Spectrum Deal Will Benefit Airtel?
The Jio-Airtel spectrum sale will allow Bharti Airtel to unlock the unutilized spectrum value which it received from the acquisition of Tata Teleservices Ltd. It does not use the acquired spectrum because it already has a network built on a 900MHz band in Delhi, Mumbai, and Andhra Pradesh regions. Besides this, Airtel has bought pan-India sub-gigahertz, mid-band and 2,300MHz spectrum, sub-GHz in the latest 4G auction. The sub-GHz band bought from the auction will enable the company to enhance 4G coverage indoors. “Airtel has sub-1GHz network pan India excluding Jammu & Kashmir. Before this, Airtel has now a sub-1GHz network all over India with at least 2×5.0MHz of sub-1GHz spectrum in all service areas which strengthens the company’s network coverage.