Airtel announced that it has signed an agreement to acquire 100% stake in Augere Wireless. Augere holds 20MHz of spectrum in 2.3 GHz band in Madhya Pradesh/ Chhattisgarh circle, which it had won in 2010 auction. The 2.3GHz spectrum band supports TD-LTE technology. This deal will increase Bharti?s 2.3 GHz footprint from 8 to 9 circles.
Augere had acquired 20MHz of 4G spectrum block in the M.P/Chhattisgarh circle in 2010 auction for Rs 1224.6mn. The pro-rata spectrum cost for remaining spectrum life (15 years) would be Rs. 918.5mn which we believe would serve as a benchmark for the deal valuation. Bharti has sufficient spectrum in this circle for 4G (FD-LTE), but this purchase will strengthen its position.
The existing 8 circles with 2.3GHz spectrum contributed 40% to Bharti?s FY15 wireless revenues vs 43% for the industry. The MP-Chhattisgarh circle contributed 3.6% to Bharti?s FY15 revenues vs 4.8% for the industry. Idea is the dominant operator in this circle with 45% revenue share compared to 21% for Airtel.
