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Bharti Airtel all set to acquire Loop Mobile

Bharti Airtel all set to acquire Loop Mobile

Bharti Airtel has come forward the frontrunner to take over Loop Mobile, which is Mumbai's one of the oldest cellular networks. If reports are to be believed, firm's owners, IP Khaitan and family, are looking to bid a goodbye to the telecom sector.

Airtel has been in discussions regarding the same for sometime now and the deal has gathered momentum in recent some weeks.

Loop, the 4th-largest operator in Mumbai, commenced operations in the year 1995, with the name BPL Mobile. In 2005, the control and ownership of the firm was taken over by Khaitan Holdings Group. Loop boasts of over 3 million subscribers as per recent numbers.

The deal, at present, is dependent on key regulatory issues and is expected to be closed once all is clear. Also, licence renewal fee is to be paid in the current year.

 "With the licence expiry due, Loop has just one year of business value left. An acquirer would want to buy into future cash flows for a longer time. So, if Loop gets to retain its 900 MHz for another 10 years, then it will be a prized asset. However, the government may decide to take back a portion of that (spectrum) for the auction pool and swap it with 1800 MHz (frequency). This clarity is essential for the deal and the final valuation," said an investment banker.

Rumor has that Idea Cellular may also have had a discussion with Loop, but an Idea spokesperson declined the same.

"We don't see value in the subscriber base. The company has a licence that is expiring, a network which has not seen investment for a year. In its current state, it is not a prized asset", a senior official of the firm said.

  | 4th September, 2013 | 106 views

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