Bharti Airtel Ltd has called off its plans to acquire business and assets including subscribers of Mumbai-based Loop Mobile for an enterprise value of Rs 700 crore as it failed to secure requisite approvals from the Department of Telecommunications (DoT), as per a stock market disclosure.
The deal was subject to regulatory and statutory approvals as intra circle M&A in telecom is not yet allowed in the country.
The two companies signed an agreement in February this year which expired on October 31. At the time of signing the agreement, Bharti Airtel had said that the transaction is expected to allow them to create Mumbai’s largest mobile network, with combined user base of 7 million connections in the region.
Over the past week, Bharti Airtel had discussed its pending approval with DoT, which was of the view that the deal should be given a conditional approval.
"Under the agreements executed with Loop Mobile, the transaction was conditional upon DoT’s approval, which even as of today has not been received. In this regard, we have been in discussions with Loop,” Bharti Airtel said in the filing to the stock exchanges.
"In light of this update and the fact that Loop's mobile licence is to expire at the end of this month, we have decided to terminate the discussions with regard to the transaction for acquiring subscribers of Loop,” it added.
Loop Mobile, owned by the Dubai-based Khaitan family, had a subscriber base of 3 million users when it had inked the deal with Bharti Airtel.
Loop also enjoyed much higher average revenue per user with a third of its customers being post-paid ones, which made it an attractive target for Airtel.
Since then, this number has come down, with users porting to competing operators, including Airtel.
Loop holds 8 Mhz of airwave frequency in 900 Mhz band. The assets of Loop Mobile include 350 mobile towers and electronic equipment on 2,100 leased towers, apart from 220 retail outlets.
(Edited by Joby Puthuparampil Johnson)