Aircel may sell wireless broadband (4G) license to refinance debt

Telecom Lead India: Aircel may be forced to sell its broadband wireless access (BWA) license that can be used for running 4G services on TD-LTE technology.

The initiative is aimed at refinancing its huge debt.

In 2010, Aircel has won licenses in 8 circles for Broadband Wireless Access (BWA) and paid around Rs 4,500 crore as spectrum fees.

Selling BWA license will be a setback for Aircel as the mobile operator wants to focus more mobile Internet business. Aircel was planning to launch 4G in 2011-12. Without 4G, Aircel will be prompted to rely on 2G and 3G for its future growth in mobile data business.

But identifying buyers for its BWA spectrum will be a tough task as there are uncertainties in the Indian telecom market. For instance, Reliance Industries’ owned Reliance Jio Infocomm is yet to launch 4G in 22 circles after buying spectrum three years back. Airtel launched 4Gin 4 circles till now.

Recently, Qualcomm sold its BWA license to Airtel.

As per the refinancing plan prepared by leading Indian banks and financial institutions, according to a report in Times of India, Malaysian telecom giant Maxis Communications will infuse up to $900 million in fresh equity and bring more capital through the proposed sale of BWA spectrum.

If Aircel cannot identify buyers for BWA license, the promoters will infuse an additional $900 million.

Lenders, led by the State Bank of India (SBI), are working out a new tenure and cost for Aircel’s $3.5-billion (nearly Rs 20,000-crore) debt. Maxis chief T Ananda Krishnan has made fresh equity commitments to push ahead with the loan recast.

Standard Chartered Bank and IDFC are advising Maxis on the latest capital infusion.

Aircel, which is downsizing its operations in India, has over 60 million mobile subscribers. Aircel  has posted Rs 1,329 crore gross revenue in the third quarter of fiscal 2013, according to TRAI data.

Earlier, Aircel tried to merge with telecom operators such as Sistema Shyam (MTS India) and Tata Teleservices to come out of the financial mess.

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