AIRTEL LIKELY TO BUY LOOP MOBILE

Bharti Airtel is in talks to buy out Mumbai-based Loop Mobile in a deal that will give the telecom major about 3 million customers. Loop, which owns a mobile telephony licence for the Mumbai circle, is in negotiations with Airtel and other telecom firms to sell its business in a Rs 750 crore deal. Loop Mobile has debt of Rs 400 crore, which is likely to be included in final deal size. While Loop and Airtel declined to comment, sources privy to the negotiations said Loop was in talks to sell both its mobile and tower business. Loop holds 8 megahertz of spectrum in the premium 900 MHz band, which as per latest base price, is valued at Rs 2,624 crore. The operator has about 2,000 operational mobile tower sites, of which 500 are company-owned. Some suitors want only Loop's mobile business, while a few are interested in the combined entity. If Airtel buys Loop's mobile business, the Khaitan-owned company will sell the tower business separately. A successful deal will reduce the number of claimants for the premium 900 MHz band in the Mumbai service area. Airtel had 4.1 million customers in Mumbai at the end of September and was ranked third in terms of subscribers. The addition of Loop Mobile's customer base would make Airtel the top operator in Mumbai, where Vodafone is currently the market leader with 6.8 million customers. Loop has decided to skip the spectrum auction scheduled on February 3. Its Mumbai licence expires in November and the company is required to bid afresh for airwaves to continue operations. The company had approached the telecom tribunal TDSAT for its right to get the license renewed and said it is willing to pay marketdetermined prices for airwaves if the renewal is granted. SONY, LENOVO EYES FOR BIGGER SHARE OF INDIAN SMARTPHONE MARKET New Delhi The Economic Times Big global brands Sony and Lenovo have entered 2014 with plans to splurge on marketing and launching a slew of handsets in India, hoping to create a flutter among the top pack by capturing a share of the lucrative market ceded by the likes of Nokia and BlackBerry. Analysts say Sony - with a strong brand presence in the laptop, television and camera segments - and Lenovo, in laptops, are best placed among handset makers with smaller market shares to close in on leaders Samsung, Micromax and Karbonn given their brand recall. They however need to aggressively invest in marketing to convince consumers that they can make good cell phones too. Homegrown Lava, which is fast gaining market share, is pegged as the dark horse, setting the stage for a potential churn at the top in two to three years. "Sony and Lenovo are serious companies and better placed than the smaller Indian players," says Jayanth Kolla, partner at telecom research firm Convergence Catalyst. "They have their own research and development and manufacture their own devices". The Mobile Store's chief executive Himanshu Chakravarti added that though Lenovo is picking up momentum in terms of marketing and sales, Sony has grown by "leaps and bounds" over the last six to eight months. "About 10 percent of our sales come from Sony. They've managed to take a good lead in the market and they've placed themselves in the mid-to-high price segment where they end up competing with only international brands," he said. Both companies, who entered the Indian handset market late 2012, said they are targeting a 10 percent share of Indian smartphone market in about two years. Sony is planning to spend substantially more in the next fiscal year starting April 1, 2014, than the Rs 300 crore it spent on marketing smartphones in 2013-2014, which itself was triple the amount the Japanese company spent in 2012-2013. Lenovo didn't give exact figures, but said its spending will be much more than in

2013. "There is no better moment for these brands, than now, to establish themselves in emerging markets," Kolla said, referring to the gap left by BlackBerry and Nokia. EXPECT A THREE-WAY FIGHT FOR SPECTRUM New Delhi, January 18, 2014 The Hindu Business Line | The Financial Express | The Economic Times | Deccan Herald | The Pioneer | The Indian Express | The Statesman | Mint | Business Standard The next round of spectrum auction is expected to be a three-way fight between Airtel, Vodafone and Reliance Jio. The three companies have deposited higher earnest money compared to others in the fray indicating that they have plans to bid for pan-India spectrum in both 1800 MHZ and 900 MHZ band. While Airtel has submitted Rs 3,600 crore as bank guarantees along with its application, Vodafone has given Rs 2,800 crore followed by Reliance Jio at Rs 2,600 crore. Under the auction rules, operators are required to submit bank guarantees specified for each circle they intend to bid. For example, if an operator wants to bid for 5MHz spectrum in the 900 MHz band in the Delhi circle it has to submit Rs 172.5 crore along with the application. Earnest money for the 1800 MHz band in the same circle has been fixed at Rs 36.25 crore. By this formula, if an operator wants to bid for 5-MHz spectrum pan-India in the1800 MHz band, it will have to pay Rs 1,906 crore in the form of bank guarantees. Earnest money for the same amount of airwaves in the 900 MHz band in Delhi, Mumbai and Kolkata is Rs 438 crore. Therefore, the earnest money deposited by the three players clearly indicate that they plan to bid for more than 5MHz in some circles. Others in the fray including Reliance Communications, Tata Teleservices, Telewings and Aircel have deposited less than Rs 500 crore each indicating that their strategy would be to acquire only incremental spectrum in some areas. Going by the initial deposit made by the operators, the Government will meet its targeted revenues of Rs 11,000 crore. But some of the players can still withdraw their applications. The Department of Telecom has allowed the companies to pull out before January 27. We expect the spectrum auctions to happen at a 20 percent premium to the reserve price, and if the entire spectrum available for auction is sold, we estimate that the government could raise Rs 57,000 crore, said a Morgan Stanley research report.