Maxis to Invest 5K Cr in Aircel, Wants to Shred 4G off by Selling Spectrum

After the failure of potential sale or merger plans with Sistema Shyam Teleservices and Tata Teleservices, Aircel’s parent company Maxis Communications of Malaysia is planning to sell its BWA spectrum to reduce its debt and operational cash crisis. Aircel has scaled down services in 6 circles, and providing 3G/HSPA services in 13 circles.

Reported by Times of India, the sale of BWA spectrum won by Aircel in 2010 auction in 8 circles is a part of re-constructing the financial plan for the cash-crunched Aircel. Maxis is also thinking to invest more than 5,000 crore as fresh equity.

The official statement regarding the same is yet to come, but if Aircel sells its 4G spectrum who will be the buyer? Scared of pan-India 4G spectrum winner Reliance Jio, Bharti Airtel is now present in 8 circles after buying stake in Qualcomm’s Indian venture and looking for expansion. In any case Airtel will buy Aircel’s 4G assets in 8 circles – Andhra Pradesh, Tamil Nadu (including Chennai), West Bengal, Bihar, Odisha, Assam, North-East, Jammu and Kashmir.

If it is not Airtel, it could be Vodafone or Idea Cellular, with whom Airtel can offer services across 16 circles. There is a little chance Uninor or MTS could run after Aircel’s 4G spectrum.

If Aircel move out from 4G, they have to push their 3G as the only way to provide mobile broadband. Out of 8 circles where Aircel has 4G spectrum Andra Pradesh and Tamilnadu are in southern zone and others are in low-ARPU earning category C circles. Aircel should try to keep these 2 circles and sell off other 6 circles.