Bharti Airtel shares rose to an intraday high of 10.80 percent to Rs 400 on Thursday, after the company — India's largest telecom service provider by subscriber base — said it will be acquiring Telenor's India operations in seven circles. The move comes days after Reliance Jio announced aggressive plans, leading to the share price of Reliance Industries Limited (RIL) rising 11 percent to a 9-year high on Wednesday. On Thursday, the RIL stock was trading marginally down at Rs 1,198 on the BSE at around 10.55 am even as ratings agency Fitch said it retained its negative outlook for the telecom sector.
Read: Reliance Jio's unlimited offer extended till March 2018
In a statement, Bharti Airtel said that it had signed an agreement with Telenor South Asia Investments Pte Ltd. to acquire its India operations in seven telecom circles comprising Andhra Pradesh, Bihar, Maharashtra, Gujarat, Uttar Pradesh (East), Uttar Pradesh (West) and Assam. The acquisition price was not disclosed by Bharti Airtel.
"The proposed acquisition will include transfer of all of Telenor India's assets and customers, further augmenting Airtel's overall customer base and network. It will also enable Airtel to further bolster its strong spectrum footprint in these seven circles, with the addition of 43.4 MHz spectrum in the 1800 MHz band," Bharti Airtel said in its regulatory filing to the BSE.
Fitch Ratings said the acquisition won't change the forecast for the telecom sector in India. " We retain our negative outlook on the sector for 2017, as fierce competition and rising capex will put pressure on most operators in the short term," it said in its analysis.
"The agreement by Bharti Airtel to buy Telenor's Indian telecom operations is the latest sign that the entry of aggressive new operator Reliance Jio is spurring incumbents to consolidate to better meet the intense competition and weaker telcos to exit altogether," it added.
Shares of another telecom operator Idea Cellular were trading 5.65 percent higher at Rs 118 on the BSE.
India's second-largest service provider Vodafone and Idea Cellular are in talks for a possible merger, which in turn could hit Bharti Airtel's dominance in the telecom space in the world's fastest-growing economy.
The BSE Sensex was up 76 points at 28,941; leading the rally were Bharti Airtel, TCS and Infosys. The Indian rupee opened at 66.96 to the US dollar on Thursday.
