Indian authorities thwart Bharti-Loop deal
The Department of Telecommunications (DoT) in India has reportedly blocked Bharti Airtel’s acquisition of Loop Mobile.
The deal, announced in February this year, would have created Mumbai’s largest mobile network, but authorities have said that the combined subscriber network of the two operators would result in revenue loss for the government.
Loop only operates in Mumbai with approximately 3 million subscribers, while Bharti delivers nationwide services with 4 million customers in Mumbai; creating a total subscriber base of 7 million in the city were the deal to materialise.
Existing law states that transferring subscribers between operators is a voluntary process which sees the user pay a fee and the government take 1% of this. The merger would see the involuntary transfer of subscribers, meaning the government loses out on its cut.
Loop’s licence is due to expire in less than two months and initially, the deal was a lifeline for the operator with Bharti further confirming its commitment to the company in June this year. This obstruction to the deal is now expected to have serious implications for Loop.