Bharti Airtel is reportedly in acquisition talks with Loop Mobile, one of the oldest networks in Mumbai. An ET report suggests that the discussion over the acquisition proposition and related details between Airtel and Loop Mobile have progressed, though the final deal will only be worked out after the government’s guidelines for mergers and acquisitions are cleared and the renewal process for the Loop’s soon-to-expire licence is sorted out. Also Read - Poco M3 Pro 5G vs Redmi Note 10: Which one offers better value under Rs 15,000?
Loop operates in the 900MHz frequency band with 8MHz of spectrum, while Airtel and Idea Cellular, another potential contender, operate in the 1800MHz band in Mumbai and thus look forward to acquire Loop in order to get hold of the 900MHz band for better service with lower infrastructure cost.
IP Khaitan group’s Loop Mobile currently had over 3 million subscribers in July with close to 30 percent of post-paid subscribers, and is amongst the highest average revenue per user (ARPU) per month generating operators in Mumbai. The acquisition would help Airtel in not only making use of the spectrum own by Loop but also to increase its subscriber base to a significant level by adding Loop’s customers in its kitty.
There is no confirmation from any of the companies over this rumored acquisition proposition, though is believed to be only struck on key regulatory issues including the licence renewal fee and M&A guidelines. Loop’s licence is set to expire in September 2014.
The government’s guidelines regarding mergers and acquisitions are not clear at the moment and neither it is clear what happens to Loop Mobile’s 900MHz band spectrum after the expiry of its license. Even if Airtel manages to get the license renewed for another 10 years, the government could possibly swap it with spectrum in the 1900MHz band. The deal is unlikely to go through unless these issues are sorted.