Idea has entered into a strategic agreement with Videocon to use the latter’s spectrum to scale up their data and voice services. This agreement will allow Idea to use the new spectrum until December 2032, which the company intends to use for deployment of 4G (LTE) in UP and Gujarat.
The transaction will be effective only after the two companies complete certain complications and written permissions from the DoT.
The agreement is for two contiguous blocks of 5 MHz each in the 1800 MHz spectrum band in Gujarat and Uttar Pradesh (West), Idea said in a statement on Tuesday. The move comes after the government last month changed rules to allow buying and selling of spectrum.
The effective date of spectrum trading will not be earlier than 45 days from the date of joint intimation, as defined in Guidelines, said both parties in a statement.
Along with the right to use spectrum, Idea will also be taking over the outstanding ‘Deferred Payment Liability’ of Videocon Telecommunications Ltd., payable to the DoT, in respect of the spectrum being acquired for service areas of Gujarat and Uttar Pradesh (West) in the November 2012 Access Spectrum auction.
Idea Cellular said it will have the right to use spectrum in the two service areas, or circles in industry parlance, until December 2032.
The deal will expand Idea’s 4G spectrum footprint to 12 service areas covering 75 per cent of its revenue.
India’s telecom market is divided into circles that mostly coincide with states, but some large markets are divided further and some smaller ones are clubbed together.
Idea said it is on track to launch 4G services based on the long-term evolution (LTE) technology in 750 towns across 10 service areas by June 2016. After the completion of this transaction, it plans to introduce 4G services in Gujarat and Uttar Pradesh (West) as well.
After completion of this transaction, Idea would have full range of mobility services across 2G, 3G and 4G technologies in all of its eight key markets of Maharashtra and Goa, Kerala, Andhra Pradesh and Telengana, Madhya Pradesh and Chhattisgarh, Haryana, Punjab, Gujarat and Uttar Pradesh (West).