Mumbai-based Loop Mobile is said to have debt of INR 400 crore (nearly US$64.6 million) which may be be included in the final transaction. The acquisition is expected to pan out in the next few days, further added PTI.
The consolidation comes with Airtel’s purchase of 900 MHz band spectrum in Mumbai. Post the deal, Airtel will get Loop Mobile’s three million subscribers, nearly 400 telecom towers, optic fibre connecting the towers and electronic equipment on which Loop’s network currently runs.
PTI reported that Loop’s license is expiring in the last quarter of this year. As per present rules, Loop was required to participate in the telecom spectrum auction that concluded on February 13, 2013 to win back its spectrum for continuing operations. Loop holds eight MHz of airwave frequency in 900 MHz band. However, the telecom service provider did not participate in the auction. Airtel participated in the auction and purchased premium 900MHz spectrum in Mumbai service area for INR 2800 crore (nearly US$452 million).
Loop is in talks to sell both, its mobile and tower business. The telecom service provider has about 2,000 operational mobile tower sites, of which 500 are company-owned, said PTI.
This is the first big consolidation move in the Indian telecom space since Idea Cellular, an Aditya Birla Group owned telecom service, acquired a majority stake in Spice Mobile in 2008. The move puts Airtel in a very strong position in the fierce telecom battle.
With the acquisition, Airtel will have nearly 7.1 million users in Mumbai. Vodafone India had a base of 6.9 million users at the end of November, 2013. The development holds immense significance, keeping in mind the heated competition between Airtel, Vodafone and Idea to claim the leader position.