Indian giant Bharti Airtel is close to acquiring much smaller rival Loop Mobile in a Rs7bn (US$113m) deal, according to multiple reports.
The deal will reportedly include Rs3bn (US$48m) worth of equity while the rest will be debt.
In a 13…
Indian giant Bharti Airtel is close to acquiring much smaller rival Loop Mobile in a Rs7bn (US$113m) deal, according to multiple reports.
The deal will reportedly include Rs3bn (US$48m) worth of equity while the rest will be debt.
In a 13 companies-strong mobile market, Loop has struggled to remain profitable. However, the wireless player owns precious spectrum in the 900 MHz band.
Owned by Dubai-based Khaitan Holdings, it operates only in the Mumbai area with around three million high-paying subscribers, and therefore generates strong ARPU.
If agreed, a deal would mark the first consolidation move in India since 2008.
Kotak Mahindra Investment Bank is the sole financial adviser for the transaction, as Bharti has not mandated any bank, according to the Economic Times.
Bharti declined to comment while Loop could not be reached.
Asked whether such a transaction could pave the way for other similar deals, an India-based analyst expressed doubts and said given the scarcity of similar assets a consolidation wave in the industry was unlikely.
Instead M&A activity will continue to be opportunistic, he told TelecomFinance, pointing to a potential deal between Vodafone India and Tata Teleservices.
Vodafone, which had also been eyeing Loop, is reportedly in early discussions with the Tata Group to acquire its 60% stake in mobile unit Tata Teleservices. A transaction would allow it to become India’s largest telco with more than 220 million customers, overtaking Bharti Airtel’s 195 million subscribers.
Both Vodafone and Bharti spent around US$3bn to acquire 900 MHz and 1,800 MHz frequencies during the country’s latest spectrum auction.
Loop, which did not take part in this recent process, had to stop providing mobile services outside of Mumbai in 2012 after its 2G licences were cancelled because of irregularities in their attribution in 2008. Several other operators were affected.
