Airtel agrees to sell spectrum to Jio; inks deal with Dixon for manufacturing JV

7 Apr 2021

Indian full-service provider Bharti Airtel has signed an agreement to sell its 800MHz spectrum in three circles to Reliance Jio Infocomm (Jio). The deal, which is subject to regulatory approvals, would see Airtel transfer the ‘Right to Use’ for its 800MHz spectrum in the Andhra Pradesh (3.75MHz), Delhi (1.25MHz) and Mumbai (2.5MHz) circles for a consideration of INR10.38 billion (USD141.2 million), with Jio also taking on future liabilities totalling INR4.59 billion. In a statement, Airtel CEO Gopal Vittal explained the company’s decision: ‘The sale of the 800MHz blocks in these three circles has enabled us to unlock value from spectrum that was unutilised. This is aligned to our overall network strategy.’ Elaborating on the strategy, the Economic Times quotes an unnamed official as saying that Airtel’s spectrum holdings in certain circles was fragmented, under 5MHz and ‘didn’t justify the CAPEX’.

In a separate development, meanwhile, Airtel’s parent company Bharti Enterprises has inked a deal to create a joint venture (JV) with domestic electronics firm Dixon Technologies to manufacture equipment for the telecom sector such as modems, routers, set top boxes and IoT devices. The JV will be majority owned by Dixon (74%), with Bharti Enterprises holding a minority stake of 26%. Dixon CFO Saurabh Gupta said of the tie-up: ‘We see [Bharti] as our ideal long-term strategic partner … we intend to leverage each other’s strengths to manufacture telecom and networking products.’ Once established, the JV will begin filing to benefit from the government’s Production Linked Incentive (PLI) Scheme, which will offer financial incentives to encourage local manufacturing and reduce the country’s dependence on imports for telecom equipment.

India, Bharti Airtel, Reliance Jio Infocomm (Jio)