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India’s Airtel in $244m acquisition amid industry shake-up

The country's largest telco operator is preparing its second purchase in a year at a time when two challengers are combining their operations.

Bharti Airtel has agreed to buy local internet services provider Tikona Digital Networks’s 4G business, including the company's broadband wireless unit and 350 sites in five 'telecom circles', as India's regional markets are known.

The country’s largest telecom player said in a regulatory filing with the National Stock Exchange that the acquisition bears a price tag of about 16 billion rupees ($244 million; €227 million). 

At the moment, Mumbai-based Tikona has 20MHz of spectrum in the 2,300MHz band in Gujarat, Uttar Pradesh (East and West), Rajasthan and Himachal Pradesh. Airtel plans to roll out high-speed 4G services on the newly acquired spectrum upon completion of the deal.

As part of the agreement, Airtel will undertake Tikona’s 4G activity in four circles, except in Rajasthan where the business will be carried out through Airtel subsidiary Bharti Hexacom. 

Once the acquisition completes, Airtel will have 30 MHz of spectrum in the 2,300MHz band across 13 circles to handle surging data demand. 

The proposed transaction is Airtel's second acquisition in a year, following its recent purchase of a smaller player. In February, it agreed to take full ownership of the Indian unit of Norway’s Telenor, giving it control of a 44 million customers base, 43.4MHz of spectrum in the 1800MHz band and 20,000 base stations. 

Earlier this week, the country’s second- and third-largest telecom players, Vodafone and Idea Cellular, proposed a merger in a bid to take over Airtel’s position with a 41 percent revenue market share. Airtel currently has a revenue market share of 33 percent.