More reports on: Videocon

Idea, Videocon terminate Rs3,310-crore spectrum deal

17 March 2016

Idea Cellular and Videocon Telecommunications have terminated a spectrum trading agreement worth Rs3,310 crore, signed in November, the telecom industry's first spectrum deal. The companies did not give any reasons for the termination of the deal.

The companies were yet to inform the transfer to licensor, the Department of Telecommunications. Also, there is no cost implication to Idea Cellular on termination of the agreement, the Aditya Birla Group said in a statement.

Idea Cellular, meanwhile, continues to aggressively launch its high speed mobile broadband 4G LTE services.

On Thursday, Idea launched its 4G LTE services in the 10th telecom service area of Maharashtra & Goa, from Nagpur city.

On 24 November, GSM operator Idea Cellular signed an agreement with Videocon Telecommunications to acquire the latter's spectrum in Gujarat and Uttar Pradesh (West) circles for about Rs3,310 crore. The company was to use the spectrum to provide 4G (LTE) services in these circles.

Idea Cellular, which is already a leader in these two circles, would be acquiring 1800 MHz spectrum in these service areas. The Aditya Birla group company will have the right to use spectrum until December 2032.

The transaction will be effective only after a due diligence of the spectrum and a written confirmation by telecom licensor Department of Telecommunications (DoT) on the transfer of right to use spectrum to Idea Cellular.

The effective date of spectrum trading will not be earlier than 45 days from this date of joint intimation, as defined in spectrum trading guidelines, it said.

The Rs3,310 crore that Idea Cellular intends to invest in the spectrum was to be adjusted after the due diligence exercise. Along with the right to use spectrum, Idea Cellular would also have taken over the outstanding deferred payment liability' of Videocon Telecommunications owes DoT for the spectrum, which was awarded during the in November 2012 auction.

With this spectrum trading arrangement, Idea's 4G (LTE) spectrum footprint will expand to 12 service areas covering over 75 per cent of its current revenue and over 72 per cent of existing 170 million subscribers.

These 12 circles currently contribute 60 per cent of the Indian telecom industry mobility revenues. After completion of this transaction, Idea Cellular would have full range of mobility services across 2G (GSM), 3G (HSPA) and 4G (LTE) technologies in all of its 8 leadership markets of Maharashtra & Goa, Kerala, Andhra Pradesh & Telengana, Madhya Pradesh & Chhattisgarh, Haryana, Punjab, Gujarat and Uttar Pradesh (West).

Idea Cellular is the third largest wireless operator in India with a revenue market share of 18.9 per cent (Q3FY16).

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