The entry and surge of Reliance Jio has literally put the Indian mobile telephony industry on fire. Hitherto market leader Airtel has announced the acquisition of Tikona Digital Network’s 4G business to take Jio’s threat head on.
The 1,600 crore deal provides Airtel broadband wireless access (BWA) spectrum across five circles in the country namely Gujarat, UP (East), UP (West), Rajasthan and HP. The acquisition will enable Airtel ramp up its 4G operations and up the ante on customer acquisition.
As on date, Airtel has close to 55 million data subscribers. Jio, the new kid on the block which has sent existing operators in a tizzy, has already breached the 50 million mark. Reliance has already disrupted the pricing structure in the telecom industry with a massive infusion of $25 billion.
Analysts aver that such pricing strategy may not be sustainable, however, as things stand, Reliance has eaten into the market share of all other operators.
The magnitude of impact of Jio’s entry can be gauged from the fact that the ‘Data’ segment has hogged the limelight vis-à-vis the ‘voice’ segment. The latest deal will enable Sunil Bharti led Airtel to bridge the gap in the 2,300 MHz band category and also reduce its spectrum usage charges (SUC).
“Airtel’s continued focus on strengthening its 4G capabilities across multiple spectrum bands will be complemented with the BWA spectrum acquisition from Tikona,” Gopal Vittal, MD & CEO (India & South Asia), Bharti Airtel, was quoted as saying.
The industry is already witnessing consolidation with the mega merger of Vodafone and Idea. The said deal will create a $23 billion behemoth and will displace Airtel from the numero-uno position in the country.