Idea Cellular Ltd, India's third-biggest mobile phone operator, has decided to buy radio airwaves in two services areas from smaller competitor Videocon Telecommunications for Rs 3,310 crore to strengthen its high-speed data services.
The deal comes a month after the government permitted phone operators to trade mobile airwaves to improve services in the world's second-biggest market according to mobile customers.
India's increasingly jammed airwaves have led to problems like calls getting cut in the middle of conversations and connectivity issues, even as more and more users use the Internet from their phones and tablets.
Idea plans to use the acquired spectrum for launching 4G broadband services in Gujarat and Uttar Pradesh (west), the company said in a statement.
Idea Cellular said it has entered "into an agreement with Videocon Telecommunications Limited (Seller) for acquiring right to use spectrum, pursuant to the DoT 'Guidelines for Trading of Access Spectrum by Access Service Providers' (Guidelines) dated October 12, 2015, for the telecom service areas of Gujarat and Uttar Pradesh (West)."
Idea plans to introduce 4G services in 750 towns across existing 10 circles by the first half of calendar year 2016.
Videocon Telecom Director and CEO Arvind Bali said, "UP East, UP West and Bihar are our low operation circles, and we were looking at exercising Spectrum Trading options. These 3 circles account for approximately 30 per cent of the country's population and have a low teledensity , hence very high potential."