New Delhi: When Reliance Jio disrupted the Indian telecom sector with unprecedented free calls and data offers, the industry witnessed a massive shakeout. Nearly ten telecom operators collapsed under the severe pricing pressure. However Bharti Airtel led by Sunil Bharti Mittal stood its ground. Instead of engaging in a direct price war that would rapidly burn cash, Mittal executed a brilliant masterstroke by acquiring struggling competitors.
Rather than taking the giant competitor head on, Airtel decided to absorb the smaller players. The strategic buying spree began in 2016 with Videocon. The company was in a terrible financial state but held valuable 4G spectrum across six telecom circles. Purchasing spectrum directly from open market auctions is notoriously expensive. By acquiring it from an existing player Airtel secured the airwaves at a massive discount of 40 to 50 percent. This instantly boosted its 4G speeds and broadband footprint.
The consolidation drive continued with Aircel. The loss making operator was desperate to exit the market. Airtel swooped in and secured a deal that gave it immediate access to 12 new circles. This move effectively expanded the footprint of the telecom giant across the entire country. Aircel had a remarkably strong presence in South India and the Northeast which were traditionally weak spots for Airtel.
The most interesting move was the acquisition of Tata Docomo. The Tata Group was struggling with a massive debt burden of roughly 20,000 crore rupees and desperately wanted to hand over the operations. Airtel agreed to absorb this enormous debt. While the liability seemed frightening, the deal brought extraordinary assets including 1 crore active subscribers and 1,80,000 mobile towers.
This strategic move gave Airtel extensive nationwide 4G coverage. If the company had attempted to buy this much spectrum in the open market it would have cost them anywhere between 40,000 to 50,000 crore rupees. By acquiring struggling companies at heavy discounts Sunil Mittal successfully countered the free data wave and cemented Airtel as a resilient telecom powerhouse in India.