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Airtel mulls more acquisitions

27 Nov 2017

India’s largest wireless provider by subscribers, Bharti Airtel, is open to acquisition talks with sixth-placed Aircel after the latter’s planned merger with Reliance Communications (RCOM) collapsed earlier this year. In an interview with the Economic Times, Airtel Chairman Sunil Mittal said of a potential Aircel takeover: ‘I think for [Aircel], it’s only the Vodafone-Idea combination or us. Whenever there will be a possibility of a conversation, I have no doubt we will be a part of that conversation.’ Vodafone and Idea Cellular, India’s second and third largest cellcos, respectively, are also currently in the process of merging their operations.

In a separate development, Airtel confirmed late last week that it was interested in acquiring some of the assets being put up for sale by RCOM’s lenders. RCOM’s creditors are looking to offload the operator’s fibre, towers and spectrum, to reclaim some of the company’s INR450 billion (USD7 billion) debt burden as it exits the wireless market. Regarding the potential acquisition by Airtel of the RCOM assets, a spokesperson for the telco stated: ‘We have expressed our interest only in buying select spectrum and some equipment.’

Commenting on recent market developments, Mr Mittal attributed the recent push for consolidation to the price war sparked by Reliance Jio Infocomm (Jio) in September last year. Whilst the chairman acknowledged that Airtel had benefited from the consolidation, Mr Mittal was critical of Jio’s practices – and the government’s response – claiming that the newcomer’s aggressive pricing and promotional period put additional pressure on already-struggling providers such as RCOM and Tata Teleservices Limited (TTSL). ‘My estimate is about USD40 billion-USD50 billion has been written off by various companies, many of whom are international investors. It is largely due to Jio … [and its] pricing. Having such a long, free promotional period, and in some sense decided by laws of the land in their favour, is unheard of. In my opinion, in Europe or the US this would have been stopped. It would have been seen as predatory.’

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