Bharti Airtel dials Loop Mobile to become top player in Mumbai

India’s largest telecom operator Bharti Airtel Ltd has signed a strategic agreement to acquire Loop Mobile for an undisclosed amount. The deal is subject to regulatory and statutory approvals as intra circle M&As in telecom is not yet allowed in the country.

Airtel has around 4 million customers in Mumbai, much behind Vodafone. Loop, which is currently controlled by Dubai-based Khaitan family, has a little over 3 million subscribers in the city and would allow Airtel to become the largest mobile service provider in the city.

Loop Mobile has a debt of Rs 400 crore, which is likely to be included in the final transaction. It was the first operator in the country to launch GPRS, caller tunes, intelligent network for prepaid, roaming on prepaid, missed call alert, etc.

Although the deal value stands undisclosed, media reports has previously put the enterprise value at Rs 700 crore, including debt of Rs 400 crore on the books of Loop Mobile.

Loop also enjoys much higher average revenue per user with a third of its customers being post-paid ones, which makes it an attractive target for Airtel.

Loop’s licence will expire in September 2014 and the firm did not bid in the spectrum auction. Loop holds 8 Mhz of airwave frequency in 900 Mhz band.

The deal is seen as a move by Airtel to acquire customers besides the telecom towers.

The deal would not go ahead immediately, however, as the mandatory norms for such intra-circle M&A between telecom operators is not in place yet. The deal would be pending till the required changes are made by the government.

(Edited by Joby Puthuparampil Johnson)

Leave Your Comment(s)