DoT gives nod to Airtel-Telenor merger

NEW DELHI: The Department of Telecom today approved merger of Telenor India with Bharti Airtel -- a move that will make the subscriber base of Sunil Mittal-led firm almost twice the size of new entrant Reliance Jio.

"We welcome all Telenor customers to the Airtel family and look forward to delighting them with best-in-class products. The acquisition consolidates our market leadership, further strengthens our network portfolio in key markets and will add to shareholder value," Bharti Airtel MD and CEO for India and South Asia, Gopal Vittal said in a statement.

The mobile subscriber base of resultant entity will reach around 334 million and Jio, which commenced operation in September 2016, had around 177 million subscribers, according to data released by telecom regulator Trai for the month of February 2018.


The telecom major said all existing customers of Telenor India will now become a part of its mobile network and will be transitioned seamlessly.

The subscribers will "continue to enjoy uninterrupted services with the Same SIM, Same Number, and Same Plan or Pack benefits", Airtel said.

Both the companies had entered in to agreement for the deal in February 2017.

The approval has come within a week of Supreme Court order that quashed DoT petition seeking security deposit of around Rs 1,700 crore and directed it to approve the merger. The guarantee included Rs 1,499 crore for one-time spectrum charge for the radiowaves allocated to Airtel without auction, and over Rs 200 crore for spectrum payment which Telenor has to make.

DoT has asked Airtel to reduce its market share based on adjusted gross revenue (money earned from telecom services) in Bihar service area to the limit of 50 per cent, within one year from the date merger of two companies is approved.
The merger will bolster Airtel's spectrum footprint in these seven circles, with the addition of 43.4 MHz spectrum in the 1800 MHz band. Telenor India runs operations in seven circles-- Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam.

"I welcome today's closing of the transaction. We are pleased with our agreement with Airtel and finding a long term solution to our India business has been a priority for us. I would like to thank the Telenor India team for their relentless and unwavering efforts over the years," Telenor Group CEO Sigve Brekke said.

Telenor announced its entry into India in 2008. However, due to intensive competition in the sector and high cost of mobile airwaves, the Norwegian firm decided to exit from India.

According to the agreement between the two companies, Airtel will absorb all employees of Telenor India that are estimated to be below 1,400.

"Airtel has already on boarded 700 employees from Telenor. The plan for the remaining employees will be communicated in due course," Airtel spokesperson said.