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Videocon-Telenor 4G Deal Hinges on Four Key Circles

The Videocon Group’s plans to sell its 4G spectrum to Telenor seem to have run into a glitch, with the Norwegian carrier wanting to buy airwaves in four circles.<br>http://www.videocontelecom.com/4G-services-plan.php

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Videocon-Telenor 4G Deal Hinges on Four Key Circles

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  1. The Videocon Group's plans to sell its 4G spectrum to Telenor seem to have run into a glitch, with the Norwegian carrier wanting to buy airwaves in four circles rather than just the two that are on offer, said two people aware of the matter.The Norwegian company wants the airwaves in Uttar Pradesh (East), Bihar, Madhya Pradesh and Haryana, while Videocon Telecom Ltd (VTL) is said to be interested in offloading just the first two of those.

  2. In the event that it does agree to sell all four, the asking price is said to be in excess of Rs 8,000 crore, a price tag regarded as too high by the Telenor. A Telenor Group spokesperson told ET that the company "refrains from commenting on rumours and market speculation." Videocon is not in a rush to sell its spectrum in Madhya Pradesh and Haryana, where business is growing. On the other hand, Telenor is keen on all four circles, given the paucity of its data bandwidth holdings and limited geographical presence.

  3. It is said to have been keen on acquiring Videocon's spectrum in Uttar Pradesh (West) and Gujarat but lost out to No 3 carrier Idea Cellular. That's made Telenor all the more eager to pick up spectrum in the four markets, said the persons cited above.Analysts also expect Telenor to step up 4G-related spectrum spending in India after failing to buy fresh 4G airwaves in a recently concluded auction in Thailand. Videocon holds liberalised and contiguous airwaves in the 1800 MHz band in Uttar Pradesh (East), Uttar Pradesh (West), Bihar, Gujarat, Madhya Pradesh and Haryana.

  4. After selling its spectrum in Uttar Pradesh (West) and Gujarat to Idea recently, the company had said it would be announcing deals for Uttar Pradesh (East) and Bihar where it's looking at a combined valuation of Rs 3,500-4,000 crore. The company is in talks with a few operators for the sale of 4G spectrum in Uttar Pradesh (East) and Bihar, and is not immediately looking to sell airwaves in Madhya Pradesh and Haryana, said chief executive Arvind Bali. "In MP and Haryana, VTL is looking at a spectrumsharing option to offer 4G services and is open to entering long-term partnerships with other operators," Bali told ET.

  5. Bali had earlier told ET that a leading overseas carrier was the main contender for the airwaves in Uttar Pradesh (East) and Bihar, without naming the company. One of the persons cited above said Videocon will consider selling spectrum in Madhya Pradesh and Haryana "only if it gets an attractive valuation in excess of Rs 4,000 crore," although it is unlikely to make "any immediate suggestions to that effect as any hint at discontinuing business could impact employee morale and retention in these markets."

  6. Videocon has a combined subscriber base of 5.7 million in Madhya Pradesh and Haryana. The four circles generate nearly Rs 36,000 crore of revenue annually, accounting for nearly 19% of India's annual mobile industry revenue, according to industry estimates. Haryana and Madhya Pradesh are growth areas for Videocon with a customer market share (CMS) of 9.25% and 5.25%, respectively.With India's top three carriers Bharti Airtel, Vodafone India and Idea starting 4G services, coupled with the upcoming launch by Reliance JioInfocomm, experts said Telenor needs to move swiftly on data growth.

  7. For More Information: http://www.videocontelecom.com/4G-services-plan.php

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