Videocon sells spectrum in Gujarat, UP to Idea for Rs 3,310 crore

Tribune News Service

New Delhi, November 24

Within weeks of Reliance Communications (RCom) announcing the takeover of Russian conglomerate Sistema's Indian mobile telephony venture SSTL that operates under the MTS brand, Videocon Industries Ltd today said it has sold its telecom spectrum in Gujarat and UP (West) circles to Idea Cellular for Rs 3,310 crore.

The funds will be used by the company to retire its debt and improve its financial metrics.

After the RCom-SSTL deal, financial details of which were not disclosed, the Videocon-Idea deal is the second such merger and acquisition after the government recently relaxed the M&A rules, giving the telecom operators a chance to strengthen their networks while allowing the not so successful networks to walk out of the telecom sector.

Reports said Videocon Telecommunications was also in talks to sell its spectrum in UP (East) and Bihar circles, which is valued at Rs 3,500 crore. The company is also in talks to sell the Madhya Pradesh and Haryana GSM business for Rs 4,000 crore by early next year, including spectrum, subscribers and network.

The company has operations in seven circles in India and the sale of the spectrum would allow it to improve its financial situation and part of the group's strategy to reduce its net debt worth Rs 39,154 crore as on December last year to more manageable levels.

Earlier this month, RCom had announced the takeover of SSTL operations in India under which the latter would hold a 10% equity stake in RCom.