Bharti Airtel said on Thursday that it has received approvals from the capital markets regulator Securities and Exchange Board of India, and from the stock exchanges BSE and NSE, for its proposed merger with rival Telenor India.
Bharti Airtel, India’s largest telecom service provider for now, has also filed a joint company application alongwith the smaller operator Telenor India before the New Delhi Bench of the National Company Law Tribunal for approval of the proposed Scheme of merger, it said in a statement. “The merger is inter alia subject to other statutory approvals including from the Competition Commission of India,” it added.
Earlier in February, Bharti Airtel had said that it will acquire Norway-based Telenor’s India unit to further augment its customer base and network, amid the ongoing consolidation in the Indian telecom sector after the entry of Reliance Jio with its free voice and data services.
As part of the deal, Bharti Airtel will not make any upfront payment to acquire Telenor India, but instead will take over its outstanding liabilities towards pending spectrum payments and other operational contracts including tower and infrastructure leases, some news reports had said at the time citing Telenor without identifying the spokesperson.
The acquisition will add Telenor’s about 44 million subscribers to Bharti Airtel’s existing 274 million mobile users in India, taking the total to about 318 million, and will give it another 43.4 MHz spectrum in the precious 1800 MHz band, which could be used to offer the highly sought after 4G services.
Telenor India operates in seven circles (service areas) with high population concentration, namely Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam, which too could boost growth prospects for Bharti Airtel, which is now looking for the next wave of customers from the under-served hinterland.
Notably, almost all the other telecom service companies in India are making moves towards consolidation, as the incumbents look for scale and operational efficiencies to take on the onslaught of competition from the giant new entrant Reliance Jio. Vodafone India – the second-largest telecom operator – is in talks for an all-share merger with Idea Cellular – the third largest – in order to gain the required scale to take on the heightened competition.