For acquiring wireless broadband spectrum which can be used for 4G services, Airtel is going to pay Rs 400 crores migration fee and bank guarantee of one-spectrum fee by merging with Airtel Broadband Services Ltd (ABSL) which holds 4G spectrum. Airtel has applied for amalgamation of ABSL, in four service areas of Delhi, Mumbai, Haryana and Kerala.
According to a source, “Airtel will pay Rs 406.49 crore equal to the difference between entry fee for UASL of Delhi, Haryana, Kerala and Mumbai service areas, and entry fee paid for merger of internet license holding BWA spectrum with UASL for respective areas.” ABSL holds internet service provider licence whereas Airtel holds old telecom Unified Access Service Licence that allows company to provide all kind of telecom services.
The present situation is such that government has issued Unified Licences which does not come along with Spectrum but allows a company to provide all kind of telecom services.
How things will change when Airtel will come into incorporation with ABSL?
Once Airtel will get merge with subsidiary ABSL it will be able to provide voice call service using spectrum. For this Airtel will need to deposit a bank guarantee of amount equivalent to one-time spectrum fee asked by government for Delhi, Mumbai, Kerala and Haryana.
This type of merging took place earlier when Mukesh Ambani led Reliance Jio Infocomm had paid about Rs 1,673 crore for migrating from ISP licence to Unified Licence that allows it to provide voice call service.
One of the leading global telecommunications company, Bharti Airtel provides product offerings that include 2G, 3G and 4G wireless services, mobile commerce, fixed line services, high speed DSL broadband, IPTV, DTH, enterprise services including national and international long distance service to carriers. Airtel is operating with its services in 20 countries across Asia and Africa. It is one of the top four mobile service providers globally in terms of subscribers. Established in the year 1995 it is a public limited company.
Airtel Broadband Services Ltd was formerly known as Wireless Business Services Private Limited, a wholly owned subsidiary, within the company. WBSPL has spectrum that can be used for high-speed 4G services in New Delhi, Mumbai, Kerala and Haryana.
After merging with ABSL it will be possible for the Airtel to provide 4G services because ABSL holds the spectrum. Acquiring the spectrum will make 4G services viable in New Delhi, Mumbai, Kerala and Haryana.