What the Jio-Airtel spectrum deal means

NEW DELHI: Bharti Airtel Ltd recently sold airwaves in the 800MHz band to bigger rival Reliance Jio Infocomm Ltd for ₹1,037.6 crore in the first such deal between the two telcos. Jio also agreed to absorb future liabilities of ₹459 crore relating to the spectrum.

The sale of spectrum in Andhra Pradesh, Delhi and Mumbai is expected to benefit both the telcos, which have been bitter rivals since Reliance Jio’s entry upended the Indian telecom industry. The Mukesh Ambani-led company introduced free voice calls and cut-rate data services in 2016, triggering a bruising price war that contributed to rivals reporting steep losses and mounting debt. Mint takes a closer look at how the two companies will benefit.

How does Reliance Jio benefit from the deal, and why is the 800MHz band important?

The spectrum trading agreement will not only help Jio build capacity in three key circles that account for 17% of its gross revenues but will also save 50% of the total cost that it would otherwise bear to buy airwaves in a government auction.