Telecom War Intensifies As Airtel Buys Tikona's 4G Biz
After the mega-deal announced by Vodafone and Aditya Birla’s Idea Cellular early this week, India’s number one telco, Bharti Airtel on Thursday said that it has inked a “definitive agreement” with Mumbai-based network solution provider Tikona Digital Networks to acquire its 4G business including the Broadband Wireless Access (BWA) spectrum and 350 sites in five telecom circles at around Rs 1,500-1,700 crore.
Airtel’s latest move would further intensify the telecom battle that was triggered by the launch of Mukesh Ambani’s Reliance Jio late last year that announced free 4G-LTE voice and data services [offer to expire by the end of this month]. This witnessed a spate of mergers and acquisitions in the domestic telecom sector in recent months. With the recent acquisition, Airtel will be the second company, after Reliance Jio, to have a pan-India presence in the 2300Mhz band - which has the second-largest ecosystem of 4G devices.
Earlier this week, Jio made allegations about network speed test company Ookla that certified Airtel as”officially the fastest network” and filed a complaint with the the Advertising Standards Council of India (ASCI) stating that the claim was “misleading” as also the term ‘officially’ is used only in the context of awards by TRAI or the Department of Telecommunications.
Airtel countered this allegation with Rajiv Mathrani, chief brand officer at Bharti Airtel’s statement: “Our latest advertising campaign is based on the findings by Ookla… Ookla’s findings are based on rigorous and extensive testing across millions of devices. We are rather amused by the allegations being made against our campaign. We believe that this is a deliberate attempt to malign our brand and misguide customers through a campaign of misinformation, which is something we now come across on a regular basis, in particular, on social media platforms.”
RJio has sent a legal notice to Ookla, too. ”You purportedly issued a certificate dated February 24, 2017 to Bharti Airtel…certifying their network to be India’s fastest mobile carrier for the same period,” Jio notice to Ookla said.
Meanwhile, Jamie Steven, COO, Speedtest by Ookla said, it stands behind the accuracy and reliability of the methodology used to designate Airtel as ‘India’s Fastest Mobile Network’. “When analyzing markets, like India, we take many factors into consideration, including dual SIM devices, network technology, device types, and more. In addition to what the user sees on their mobile application as they take a test in real-time, we apply a rigorous methodology when aggregating the data which uses a variety of internal data sources that control for potential variability in the market,” he said.
Amidst the bitter fight, Airtel’s acquisition of Tikona further deepens the telecom battle in India that’s already underway. As per the merger between Idea Cellular and Vodafone India, the combined entity would now become the country’s largest telecom operator, with almost 400 million customers, 35% customer market share and 41% revenue market share.
“Airtel’s continued focus on strengthening its 4G capabilities across multiple spectrum bands will be complemented with the BWA spectrum acquisition from Tikona. We believe that combining our capacities in TD-LTE (term division-long-term evolution) and FD-LTE (frequency division-long-term evolution) will further bolster our network, and help us provide unmatched high-speed wireless broadband experience to our customers,” said Gopal Vittal, MD & CEO (India & South Asia), Bharti Airtel in a statement.
“We remain committed to our vision of leading India’s digital revolution by offering world-class and affordable telecom services through a robust spectrum portfolio spread across multiple bands,” he added.
Reports also suggest that the Tata group and merged RCom-Aircel, MTS may be further looking to join forces to counter the tough competition from Reliance Jio. If the RCom merger goes through, then then the combined entity (with the four players RCom-Aircel-MTS-Tata Tele) will become the third largest telecom player will look to grab the third spot in India’s telecom sector, just behind Bharti Airtel and Vodafone-Idea. The proposed merged telecom entity is expected to have over 260 million subscribers and a market share of 18%.
Currently, Bharti Airtel holds the top spot in the Indian telecom space with 266 million users and a 31% market share. The question is ripe on everyone’s mind whether Airtel can single-handedly fight and win the war. A part of the answer may lie in the recent buyout that will give Airtel an edge with 4G services.
According to the agreement, the acquisition of the 4G business in Gujarat, UP (East), UP (West) and Himachal Pradesh will be undertaken by Airtel, while in the Rajasthan circle, it will be accomplished through Airtel’s subsidiary Bharti Hexacom Limited. While the acquisition is still subject to regulatory approvals, the telco would reportedly have 30 MHz in 2300 MHz band in 13 circles after the deal.
Experts believe that Airtel can reach a sustainable cost position in these circles because with increased spectrum, it can offer the data at an inexpensive rate and still remain profitable. This spectrum-driven acquisition can keep the momentum going, and customers can enjoy cheaper services.
“After the Vodafone-Idea deal, this is another step towards consolidation in the Indian telecom sector. Overall, things are heading in the right direction for a healthy competition,” said Rishi Tejpal, Principal Research Analyst, Gartner told CXOtoday.
“Airtel’s acquisition of Tikona’s 4G spectrum fills the gap that it had in the TDD-LTE band mainly in UP East, UP West and Rajasthan circles. With this acquisition Airtel will have nationwide TDD-LTE spectrum,” he added.
According to a Nokia MBIT report, 97 per cent 4G devices being used in India are compatible with 4G services using the 1800 Mhz band, earlier called 2G spectrum, and 90 per cent are compatible with the 2300 Mhz band.
- 39% Indian Techies Can Code Before They Turn 20: Study
- A Big Online Boost To India’s Small Businesses
- Infor To Double Revenues By 2020: IMEA GM
- Using Cloud To Empower SMB Innovation
- How Tech Has Revitalized India's Financial Planning Market
- Lack Of Integrated Tools Leads To Project Failure: Study
- IITs, IIMs Salary Skyrocket; Overall Hiring Slows Down
- India Says 'Yes' To Net Neutrality; What Does It Mean
- Using AI, Big Data To Design The Right Curriculum
- Smart Devices To Add Up To $685 Bn to Manufacturing Revenue By 2020: Study