Telenor ASA has on 23 February 2017 entered into a definitive agreement with Bharti Airtel Limited (Airtel), whereby Airtel will take full ownership of Telenor India.
The move forced rivals -- desperate to maintain market share -- to slash their tariffs and scrambling to match the deep pockets of Jio, which is backed by Ambani's vast energy-to-chemicals conglomerate Reliance Industries.
"The proposed acquisition will include transfer of all of Telenor India's assets and customers, further augmenting Airtel's overall base and network," the Indian firm said in the statement.
"We believe today’s agreement is in the best interest of our customers, employees and Telenor Group. Finding a long term solution to our India business has been a priority for us, and we are pleased with our agreement with Airtel. The decision to exit India has not been taken lightly. After thorough consideration, it is our view that the significant investments needed to secure Telenor India’s future business on a standalone basis would not have given an acceptable level of return," says Sigve Brekke, Chief Executive Officer of Telenor Group.
According to the agreement, Bharti's acquisition, which still needs to be approved by regulators, will enhance its coverage, the company said in a statement to the Bombay Stock Exchange (BSE). Airtel and Telenor India will merge and Airtel will take over Telenor India as soon as all necessary approvals are received. As part of the agreement, Airtel will take over outstanding spectrum payments and other operational contracts, including tower lease.
Last month British mobile phone behemoth Vodafone announced that it was in talks to merge its Indian unit with Mumbai-based Idea Cellular in a move that would create India's largest telecoms company.
Global brokerage firm CLSA estimated that the pair would command a combined 43 percent share of market revenue, ahead of Airtel, which is currently the market leader, on 33 percent.
Comments
Post a Comment