Bharti Airtel, RIL up 3% each on signing spectrum transfer deal

Shares of Reliance Industries (RIL) and Bharti Airtel gained 3 per cent each on the BSE in the intra-day trade on Wednesday after Reliance Jio Infocomm (Reliance Jio) signed a definitive agreement with Bharti Airtel to acquire the right to use spectrum in the 800-megahertz (MHz) band in Andhra Pradesh, Delhi, and Mumbai circles through spectrum trading.

The stock of RIL was up 3 per cent at Rs 2,046, while Bharti Airtel gained 2.7 per cent to quote at Rs 546 on the BSE in the intra-day trade today. At 12:17 pm, these stocks were trading higher by 2.6 per cent each, as compared to a 1.2 per cent rise in the S&P BSE Sensex.

Through this agreement, which is subject to statutory approvals, Bharti Airtel will receive a consideration of Rs 1,037.6 crore from Jio for the proposed transfer. In addition, Jio will assume future liabilities of Rs 459 crore relating to the spectrum.

“The sale of the 800 MHz’ blocks in these three circles has enabled us to unlock value from spectrum that was utilised. This is aligned to our overall network strategy,” Gopal Vittal, MD & CEO (India and South Asia), Bharti Airtel said on Tuesday.

With this trading of right to use spectrum, RJIL will have 2X15MHz of spectrum in the 800MHz band in Mumbai circle and 2X10MHz of spectrum in the 800MHz band in Andhra Pradesh and Delhi circles, thereby further consolidating its spectrum footprint in these circles. With the enhanced spectrum footprint, especially contiguous spectrum, and superior infrastructure deployed, RJIL has further increased its network capacity, Jio said.

RIL-owned Jio Platforms Ltd houses the telecom business and a slew of other digital services such as healthcare, payments, gaming, cloud, over-the-top (OTT) content, music, among others.

“The sale of the 800 MHz blocks in these three circles has enabled Airtel to unlock value from the spectrum that was unutilised as it has sufficient spectrum in these circles. Jio has enhanced its contiguous spectrum footprint, on the other hand. More importantly, the big takeaway is the increasingly collaborative approach among key players, which bodes well for collective decision making, including tariff hike,” ICICI Securities said in a note.