Idea buys Videocon’s spectrum for Rs 3,310 cr

Industry:    2015-11-25

In India’s first telecom spectrum trading transaction, Videocon Telecommunications, a subsidiary of Videocon Industries, on Tuesday sold its spectrum in Gujarat and UP (West) circles to Aditya Birla group’s Idea Cellular at a valuation of Rs 3,310 crore. A top official of Videocon said the company was also in talks with multiple bidders to sell its spectrum in UP (East) and Bihar circles at a valuation of Rs 3,500 crore. It will also sell spectrum, subscribers and network in Madhya Pradesh and Haryana circles for Rs 4,000 crore by early next year. In total, the group would raise Rs 14,000 crore by monetising its telecom assets alone, the company said in a statement. The firm has operations in seven circles in India, including in the profit-making Punjab circle. ADVERTISING In a statement, Idea Cellular said it would use the spectrum bought on Tuesday to roll out its fourth generation-based telecom services in the next few months. Idea said the spectrum was valid till December 2032 and the transaction would be effective only after completion of due diligence and clearance from the department of telecom. Idea will also be taking over the outstanding “deferred payment liability” worth Rs 482 crore of Videocon Telecommunication payable to DoT for the two circles. This payment will be deducted from the payment to be made to Videocon. Himanshu Kapania, MD of Idea Cellular said the transaction will help Idea to increase its 4G footprint in 12 key circles which contributes 62 per cent of its revenues and caters to 170 million customers. “We will fund the transaction with our own cash and debt. Idea generated close to Rs 5,000 crore in cash in the first half of the current fiscal part of which will be used for this transaction,” Kapania said.

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