A day after we reported about a possibility of Bharti Airtel acquiring Loop Mobile, a deal has reportedly been finalized, Business Standard reports. Bharti is reported to have paid Rs 700 crore for the acquisition of which Rs 400 crore goes into repaying the latter s debts, while the rest of the Rs 300 crore will be used to acquire Loop Mobile s customer base and cell sites.
Markets analysts are calling this deal a steal, since Bharti Airtel has got a ready user base and infrastructure in Mumbai for a mere Rs 300 crore, which otherwise would have cost the company anywhere between Rs 400-500 crore to build from scratch.
With this deal, Bharti Airtel becomes the largest telecom operator in the Mumbai with 7 million active users, pushing Vodafone with 6.9 million users to second place.
Airtel, which bought 900MHz band spectrum in Mumbai in the just-concluded auction, won t be earning any more spectrum from this deal, as Loop only owns 5MHz in the 900MHz band, which is set to lapse in November this year.
Loop Mobile, founded in 1995 as BPL Mobile, is the oldest telecom operator in Mumbai. In over 16 years of service, Loop Mobile had garnered over 3 million subscribers, which hasn t seen a growth for quite some time now. The operator has been reeling under debts in the range of Rs 400 crore and also had its licenses revoked by the Supreme Court in 2012, citing irregularities in grant of permits.