With the Supreme Court dismissing its objections, the department of telecommunicatons (DoT) on Monday approved the merger of Telenor India with Bharti Airtel, thus paving the way for the exit of the Norwegian telecom operator from the Indian market and strengthening Bharti’s spectrum holding in 4G-enabled 1800 MHz spectrum in seven circles.
“The effective date for transfer of all assets and liabilities related to DoT shall be as per the scheme of amalgamation approved by the NCLT on March 8, 2018,” DoT said in a notification. As ordered by the Telecom Disputes Settlement and Appellate Tribunal and the SC the approval was granted without Bharti having to pay Rs 1,500 crore towards the one-time spectrum charge (OTSC) levied by the DoT.
In February 2017, Bharti had announced that it is acquiring Telenor India in a no-cash deal. Bharti will acquire Telenor India’s operations in seven circles — Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam.
The merger provides Bharti with 43.4 MHz spectrum in 1800 MHz band, 5 MHz to 7.2 MHz in each of the seven circles, as well as 39.30 million subscribers. Post-merger, Bharti will have a revenue market share of 32.3%, subscriber market share of 29% and its total spectrum holdings across all bands will increase to 979.45 MHz.
The DoT has asked Bharti to reduce its market share based on adjusted gross revenue in Bihar service area to the limit of 50%, within one year from the date merger of two companies is approved. The NCLT had approved the proposed merger on March 8.
The news could not have come at a better time for Telenor, which entered India in 2008, and like other small operators has been facing tough times after the launch of Reliance Jio in September 2016. Small operators have consistently lost subscribers and have not been able to infuse enough cash in their operations to take on the low priced bundled offer war started by Jio. For January-March 2018, Telenor India reported a revenue of Rs 541 crore and a net loss of Rs 238 crore.
Bharti will now begin the process of integrating Telenor India’s operations with its own. It also plans to step up investments and aggressively expand its high speed data network across the country over the coming year as part of Project Leap, its network transformation programme.