Telecom service providers Reliance Jio and Bharti Airtel today announced the signing of a spectrum trading agreement with each other to transfer the ‘Right to Use’ of Airtel’s 800 MHz spectrum in Andhra Pradesh, Mumbai, and Delhi to Reliance Jio.
Reliance Jio will get 3.75 MHz in Andhra Pradesh, 1.25 MHz in Delhi, and 2.5 MHz spectrum in the 800 MHz band (FDD) from Bharti Airtel as part of the spectrum trading agreement.
| Circle | 800 MHz band (FDD) |
|---|---|
| Andhra Pradesh | 3.75 |
| Delhi | 1.25 |
| Mumbai | 2.5 |
The spectrum trading agreement will generate a consideration of Rs 1037.6 crores from Reliance Jio for the proposed transfer with Reliance Jio also taking up the further liabilities of Rs 459 crores relating to the spectrum. The aggregate value for the right to use this spectrum comes out at Rs 1497 crores.
The transaction is subject to requisite regulatory and statutory approvals with trading agreement in accordance with the Spectrum Trading Guidelines issued by statutory approvals.
Reliance Jio will now have 2X15 MHz of spectrum in the 800 MHz band in Mumbai circle and 2X10 MHz of spectrum in the 800 MHz band in Andhra Pradesh and Delhi circles further consolidating its spectrum footprint in these circles. The enhanced spectrum footprint including contiguous spectrum and superior infrastructure will allow Reliance Jio to increase its network capacity.
Gopal Vittal, MD & CEO (India and South Asia), Bharti Airtel said, “The sale of the 800 MHz blocks in these three circles has enabled us to unlock value from spectrum that was unutilised. This is aligned to our overall network strategy.”
As a consequence of the spectrum trading agreement, Reliance Jio’s spectrum portfolio now stands at 1732 MHz up from 1717 MHz while Bharti Airtel’s spectrum portfolio is down to 2092.1 MHz from 2107.1 MHz. Bharti Airtel’s sub-GHz portfolio is down from 340.6 MHz to 325.6 MHz whereas Reliance Jio’s sub-GHz portfolio is up from 395 MHz to 410 MHz.
Why Jio has not acquired spectrum in UP West circle. They only have 5 Mhz in 850 Mhz in UP West circle. Also it is a high density, high value circle.
Because, that is the deal between Airtel and Jio. Airtel is badly in need of sub GHz spectrum in UP(W), where enough 900MHz is not available. Jio wants cheaper 850MHz of Airtel in Delhi, AP & Mumbai. It is just a give and take policy…
Jio has 10 MHz in band 5 in u.p. west circle .
5 MHz is through trading / sharing agreement between jio & rcom .
Other 5 MHz jio has own purchased.
Airtel will deploy band 5 spectrum in four circles .
Maharashtra , m.p. , Haryana & u.p. west as they do not have 900 MHz in these circles.
The spectrum sharing agreement between two operators is valid only up to the licence validity of either of the operators or the validity of the shared spectrum of either of the operators, whichever is earlier. In the case of Rcom and Jio, Rcom’s license in UP West expires in July which means the sharing agreement will end at that time and Jio will be left with just it’s own 5 MHz there. The only way for Jio to have access to 10 MHz band 5 spectrum in UP West is to sign a new sharing agreement with Airtel next year or to buy Rcom’s spectrum if it is auctioned under bankruptcy proceedings.