Mumbai based telecom company Loop mobile is taking exodus from the telecom sector,oldest mobile operator in India.Loop mobile promoter Dubai based Khaitan holdings reported by economic times earlier Loop was in talks with the India Top Telecom company Idea Cellular,Aircel&Telenor,but in the final neogation,handed to Bharti Airtel.
Loop Mobile is the one of the oldest telecom company and serving by name BPL since 1995 now it serves nearly 3 million subscribers.Loop Mobile turnover is of 128 crore till December 2012,at the same time Loop enjoys ARPU in the circle & 30% of the postpaid customer base has only 44.36% active subscribers,second lowest in the telecom sector.
What will be the strategy of the buyers including Bharti Airtel.8Mhz of the spectrum in the 900Mhz frequency band that Loop operates in.In Mumbai both telecom company Airtel And Idea are there and serving services in the 1800 MHz band,900Mhz is the efficient for the cellular companies in that case less cell phone tower required thus it cut the capital.
Loop mobile Sister Firm Loop Telecom grabbed licenses in 21 circles in 2008 during A RAJA,telecom minister,but all license cancelled in February 2012 by the SC verdict.Now Loop is present only in the Mumbai circle but circumstance is that this license will expired in September 2014.Like Airtel, Vodafone and Idea Loop also filed a case against Government for 10 years license extension.
It’s obvious that Airtel and Loop’s merged entity will be the market leader in Mumbai with 30% market capture.But Airtel weighed on,how 8Mhz spectrum should be served on 900Mhz band which will more Efficient for the company,but also compensates it capital expenditure.Nothing is conformed nor fixed valuation if government extent license.Now every thing depends on the government,M&A rules and regulation for telecom sector.
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