Telecom operator Bharti Airtel Will acquire the business of Telenor India for an undisclosed sum in all seven circles where it holds spectrum.
Airtel on Thursday said it has "entered into a definitive agreement with Telenor South Asia Investments Pte Ltd to acquire Telenor (India) Communications Private Limited."
In a separate statement, Telenor said that the transaction will not trigger any impairment. As of fourth quarter 2016, the remaining value of tangible and intangible assets in Telenor India amounted to NOK 0.3 billion. The transaction is expected to close within 12 months," Telenor said.
Airtel is India's largest wireless operator with over 269 million subscribers and a revenue market share of over 33 per cent. As the new owner, Airtel will take over Telenor India's spectrum, licenses and operations, including its employees and customer base of 44 million. As part of the agreement, Airtel will acquire Telenor India's running operations in seven circles - Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam.
"The proposed acquisition will include transfer of all of Telenor India's assets and customers, further augmenting Airtel's overall customer base and network. It will also enable Airtel to further bolster its strong spectrum footprint in these seven circles, with the addition of 43.4 MHz spectrum in the 1,800 MHz band," Airtel said. Telenor India's operations and services will continue as normal until the completion of the transaction.
"On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position in several key circles. The customers of Telenor India will now be able to enjoy ...a range of Airtel's world-class products and services," Gopal Vittal, Managing Director and CEO (India and South Asia), Bharti Airtel, said.
The acquisition of additional spectrum through this transaction, which made an attractive business proposition, has further enhanced Airtel's spectrum portfolio, Vitthal said.
"Finding a long-term solution to our India business has been a priority for us, and we are pleased with our agreement with Airtel. The decision to exit India has not been taken lightly. After thorough consideration, it is our view that the significant investments needed to secure Telenor India's future business on a standalone basis will not give an acceptable level of return," Sigve Brekke, Chief Executive Officer of Telenor Group, said.
With effect from the first quarter of 2017, Telenor India will be treated as an asset held for sale and discontinued operations in Telenor Group's financial reporting.
Airtel shares gain on deal
Shares of Bharti Airtel on Thursday soared nearly 11 per cent before ending higher by over 1 per cent after telecom operator announced acquisition of Telenor India. The stock surged 10.93 per cent to Rs 400.65 in intra-day trade on BSE. It, however, later surrendered most of the gains to end at Rs 366.05, up by 1.36 per cent over the previous close.
At NSE, shares of the company rose by 1.45 per cent to Rs 366.25 at close. On the volume front, 21.40 lakh shares of the company were traded on BSE and over 3 crore shares changed hands at NSE during the day. Meanwhile, shares of other telecom players also advanced with Idea Cellular soaring 6.40 per cent, RCom by 3.22 per cent.
Airtel Payments Bank to sell MF products, insurance
Airtel Payments Bank (APB) is planning to sell third party financial products to boost its revenue from other income category, an official said.
"As per RBI guidelines, we are not allowed to carry out lending activity. But we are allowed to sell third party financial products like other banks do", MD and CEO of APB Shashi Arora said.
Starting operations few months ago, the bank had already opened 2.5 lakh banking points across the nation with a total customer base of two million spread across geographies.
"We plan to sell insurance and MF products through our network in near future. After that, we will also offer loan products of other entities like NBFCs as we are not allowed to do lending directly", he told reporters here on Thursday.
Payments banks were now required to park 75 per cent of their total deposits in SLR securities and the balance 25 per cent in other instruments as prescribed by the RBI.