Idea, Videocon call off Rs 3,310 crore spectrum deal

NEW DELHI: 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 on Wednesday, the two 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.

On November 25, 2015, the board of directors of Idea had empowered the company to enter into an acquisition agreement for right to use 1800MHz spectrum of Videocon, a joint statement from the two companies said. “No joint intimation of this transfer agreement for right to use spectrum under trading guidelines was filed with DoT. Also, there is no cost implication to Idea on termination of the aforesaid agreement,“ the statement added.

Videocon had acquired spectrum in the 800MHz band, known as 2G spectrum, in these two service areas for Rs 1,329 crore in November 2012 and made an upfront payment of Rs 439 crore to the government.

Idea on Wednesday launched its 4G LTE services in the 10th telecom service area of Maharashtra & Goa. Idea said it owns 3G and 4G spectrum in 17 service areas representing 87% of its revenue (4G coverage 61% of revenue), and now offers high speed mobile broadband services (3G & 4G) in around 4,500 towns and 60,000 villages. The company said it remains on track to launch 4G LTE services in 750 key towns across these 10 telecom circles latest by end of June 2016.

Meanwhile, the Telecom Commission, an inter-ministerial body, is scheduled to meet on March 28 to discuss the next round of spectrum auction, which would see radiowaves worth Rs 5.36 lakh crore put up for sale. Trai has suggested a plan for spectrum sale, expected to be held in July this year, which has a potential to fetch Rs 5.36 lakh crore. It will be the biggestever auction in terms of value and is more than double the gross revenue of the telecom services industry. Telecom service providers had a gross revenue of Rs 2.54 lakh crore in 2014-15.

Trai has recommended a record high base price of Rs 11,485 crore per Mhz for the 700 Mhz band. If all available radiowaves under this get sold at the Trai-suggested price, it alone will yield Rs 4 lakh crore.