Bharti Airtel completes Aircel 4G spectrum purchase in 7 out of 8 circles

aircelBharti Airtel said it has completed the purchase of 2.3 GHz 4G spectrum from Aircel Cellular in 7 out of the 8 circles mentioned in an agreement between the companies earlier this year.

These seven circles are Tamil Nadu, Bihar, Jammu & Kashmir, West Bengal, Assam, North East and Orissa.

With this, only the transaction in Andhra Pradesh remains to be consummated.

Bharti Airtel, India’s largest telecom company, announced it was buying 20 MHz of 4G spectrum from Aircel Cellular in eight circles. The deal, revealed in April, was dependent on the two companies getting regulatory approvals in each of the circles.

The purchase gives a major boost to Bharti Airtel’s attempts to boost its defences against attacker Reliance Jio.

Jio currently owns about 50-60% of the high-speed wireless data capacity in India, according to a recent analyst report.

Much of Jio’s advantage comes from the copious amounts of spectrum that it has. It is the only company which has pan-India 4G spectrum in the 2.3 GHz band.

Unlike other bands like 1800, the 2.3 GHz band is based on a single-block model, where the entire 20 MHz can be used for download traffic or upload traffic as the owner sees fit. In other bands, 5 MHz of spectrum is used for upload and 5 Mhz for download.

As a result, while typical download speeds on the 2.3 GHz network range between 30-65 Mbps, it ranges between 7-15 Mbps in other bands.

With the acquisition, Bharti Airtel will have access to 2.3 GHz band 4G spectrum in all circles except three or four, making it a serious competitor to Jio.

Vodafone, the No. 2 operator in India, is also keen on acquiring a pan-India foot print in the 2.3 GHz band, and had lobbied with the telecom regulator to ensure that the minimum bid size for the band remained at 20 MHz in the upcoming auction. This would have ensured that Bharti and Jio would not be able to bid for the same.

However, the TRAI did not accept the suggestion, and instead went with the suggestion by Airtel and Jio that the minimum bid size for existing operators need to be only 10 MHz.

This has set the scene for a battle royale in the 2.3 GHz band with both Bharti Airtel and Reliance Jio trying to increase their holding in the band to 30 MHz each, while Vodafone tries to ensure that it has access to at least 20 MHz of this spectrum across India.

Vodafone, which risks getting left behind in the 4G race in India, could also look at the adjacent 2.5 GHz band for getting its hands on cheap spectrum, but the company will face issues related to handset compatibility. Most 4G handsets in India support only 1.8 GHz and 2.3 GHz 4G bands.