Bharti Airtel, India’s largest mobile operator, is poised to buy telecoms group Loop for about $110m in the first deal of a long-awaited consolidation that is expected to reshape India’s mobile sector.
Under the deal Bharti will purchase Loop’s operations in India’s financial capital of Mumbai, which include various infrastructure assets and about 3m customers.
Bharti’s move kicks off an expected industry-wide shakeout that is likely to involve most of the sector’s other major players, including Vodafone of the UK and billionaire Mukesh Ambani’s Reliance Industries.
“This is significant, because it is the first acquisition the industry has been waiting for,” said Ankur Rudra, a telecoms analyst at Mumbai brokerage Ambit Capital.
“There are a number of other companies that are on the block, so more deals are likely to follow.. . It also means Airtel will take on Vodafone in Mumbai, which is one of the biggest and most competitive markets.”
Vodafone is in discussions with the Tata group over a deal in which the British company could purchase a majority share in the Indian conglomerate’s struggling mobile arm.
Meanwhile, other minor players including Aircel, which is owned by Maxis of Malaysia, are widely understood to be up for sale, according to industry figures.
Bharti on Tuesday said it had signed as “strategic agreement” for Loop’s operations in Mumbai that would “undergo seamless integration once definitive agreements are signed”.
News of Bharti’s acquisition is likely to be taken as a signal of intent by the group’s owner, billionaire Sunil Bharti Mittal, who is India’s most high profile telecoms entrepreneur.
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