Airtel planning to buy the Indian business of Telenor
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"The talks are quite advanced.
Sources said the development follows Telenor's inability to strike a deal with its rivals. Reluctant to take on debt, No. 3 Idea is believed to have offered equity but that didn't appeal to Norway's Telenor, which wants a complete exit from India.
Before that, Telenor had started talks with various players including
Airtel, which had consolidated net debt of $12.23 billion (over Rs 83,000 crore) as of September, wouldn't want to increase this burden by too much, but 4G spectrum in seven circles is quite a lure, said the person cited above.
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Incidentally, Idea had in March pulled out of a deal to buy
Telenor has marked down value of its India business by 6.3 billion krone (Rs 5,000) crore since beginning of 2016 - a Rs 4,000 crore writedown of the value of licences alone - and didn't participate in the October spectrum auctions, signaling its intent to exit a market where it has been making losses and struggled to expand operations.
Buying Telenor makes sense as spectrum harmonisation has made the smaller telco's airwaves more attractive. The
Telenor has nearly 54 million subscribers, and its seven circles account for nearly 45% of subscriber share and nearly 40% of industry revenue. "Telenor records nearly Rs 5,000 crore top line annually. Even if Airtel gets around Rs 4,000 crore top line addition (taking into account some users choosing another operator), it would still net an ebitda of 70-80% of that. Moreover, Telenor has recently upgraded its network, so, it's practically brand new," said an analyst at a foreign brokerage asking not to be named.
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