Bharti Airtel said it has closed its deal to transfer CDMA spectrum to Reliance Jio Infocomm and received the money.
“Airtel has received Rs. 1004.8 crores (net of tax) from Jio for the proposed transfer. In addition, Jio will assume future liabilities of Rs. 469.3 crores relating to the spectrum,” the Gurgaon-based company said.
The spectrum that has been transferred are 3.75 MHz in Andhra Pradesh, 1.25 MHz in Delhi and 2.5 MHz in Mumbai.
Jio uses 800 MHz spectrum to ensure inbuilding voice coverage for its 4G service.
The spectrum was earlier being used by RCom and Tata DoCoMo for CDMA services. However, with the emergence of 4G technology, the spectrum was diverted to LTE services.
Bharti Airtel had acquired most of the assets of Tata DoCoMo a few years ago after the latter found it difficult to go forward due to high levels of competition.
Bharti Airtel does not use 800 MHz spectrum, but does use 900 MHz spectrum for delivering its 4G services.
Trying to deploy and integrate the 800 MHz spectrum into Bharti Airtel’s existing network would have required considerable readjustment of the company’s radio network.
Moreover, LTE over thin slices of spectrum, such as 1.25 MHz or 2.5 MHz, is highly inefficient.
On the other hand, Jio already has 5 or more MHz of spectrum in this band in these circles, and can easily add the additional spectrum to its existing 4G network at practically no extra cost.
Bharti Airtel is also in need of urgent funds due to the Supreme Court’s refusal to consider even arithmetical errors in calculating past spectrum dues, forcing the company to pay tens of thousands of crores to the government in the near future.