Videocon Shares Surge 17% on Spectrum Deal

Shares of Videocon Industries today surged by up to 17 percent after Bharti Airtel said it will acquire Videocon Telecommunications’ spectrum in six circles in the 1800 MHz Band for a consideration of Rs 4,428 crore. 

Videocon Industries surged 17 percent to Rs 128 on BSE. Bharti Airtel’s shares rose by 3.63 percent to Rs 352. ”Bharti Airtel has entered into a definitive agreement with Videocon Telecommunications Ltd (VTL) to acquire, at an aggregate consideration of Rs 4,428 crore, rights to use 2×5 MHz spectrum in 1800 MHz band for six circles,” the company said in a BSE filing.

Meanwhile, Idea Cellular and Videocon Telecommunications have mutually agreed to call off their Rs 3,310-crore spectrum deal for two telecom circles. In a joint statement released yesterday, the companies said they have agreed to terminate the agreement regarding spectrum sale in Gujarat and UP (West) with immediate effect.

Idea in November last year had announced to buy airwaves held by Videocon in these two circles for Rs 3,310 crore, which was billed as the first spectrum trading deal of the country.

“Idea Cellular (Buyer) and Videocon Telecommunications Limited (Seller) mutually agreed to terminate their earlier agreement regarding ‘Transfer of Right to Use 1800 MHz Spectrum’ in two service areas with immediate effect,” a joint statement of the companies had said.

Airtel rival Idea Cellular had tentatively arranged to acquire Videocon spectrum in two circles, but called off this deal on Wednesday. The closing of the transaction is subject to satisfaction of standard conditions. The buy will boost the telco's 4G footprint across bands to 19 circles from 15, just short of Reliance Jio's holdings across all 22 circles. The spectrum is valid till 18 December, 2032.

With Reliance Industries set to unleash its telecom juggernaut, nervous incumbent operators - Airtel and Idea Cellular - have taken their fight to grab more 4G spectrum from the auction room to the marketplace. The companies, however, did not specify any reason for the cancellation.

"This includes Bharti's acquisition of spectrum in the 1800 MHz band from Videocon for Rs 4,428 crore".

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