India’s largest telecom operator Bharti Airtel Ltd is set to acquire Loop Mobile in Rs 700 crore ($113.4 million) deal that may be announced this week, as per several news reports citing sources. Loop is currently controlled by Dubai-based Khaitan family.
The acquisition will bring Loop’s 3.2 million subscribers besides around telecom 400 towers in Mumbai under Airtel, making it the top player in India’s financial capital. Loop also enjoys much higher average revenue per user with a third of them being post-paid customers, which makes it an attractive target for Airtel.
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.
The deal would come soon after Airtel committed to shell out Rs 18,530 crore in the just-concluded spectrum auctions.
Loop’s licence is to 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 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)