Today's newspapers have reported that Bharti and Videocon have signed a deal for trading spectrum in 1800 MHz band across 6 circles. The purpose of this note is to layout the synergy between spectrum holding of Bharti and Videocon and the possible impact on other operators on account of this deal in these circles. One can also refer to my earlier note titled "Why is demand for Videocon's 4G Spectrum so high?". The following table lays out the spectrum holding across all bands of the combined entity of Bharti & Videocon. 
Videocon's assignments are overlapped on top of Bharti's and are marked in light green color. The first column indicates the year of purchase of spectrum and the last column lists the total price paid (across all circles) in Rs Cr when spectrum got acquired. Also, the spectrum of the same band is listed in different rows to indicate the level of fragmentation and its ability to be used for 3G/4G.
Bharti - Videocon Spectrum Synergy 
1. In Bihar (before this deal), Bharti had no capability to roll out LTE services. It only had 3 MHz in the 1800 MHz band that too un-liberalised and expiring in next 8 years. Hence, Videocon's 5 MHz spectrum will enable Bharti's with LTE capability. Bharti had an alternative option of acquiring 1800 MHz spectrum in Bihar (2 slots of 5 MHz each will be available after completion of the harmonization process which is currently in progress).
2. In Gujarat (before this deal), Bharti had no capability to roll out LTE services. It only had 6.2 MHz in the 1800 MHz band that too un-liberalised and expiring in next 5 to 6 years. Hence, Videocon's 5 MHz spectrum will enable Bharti's with LTE capability. Bharti had an alternative option of acquiring 1800 MHz spectrum in Gujarat directly through auctions (2 slots of 5 MHz each will be available after completion of the harmonization process which is currently in progress).
3. In Haryana (before this deal), Bharti had 20 MHz LTE spectrum in the 2.3 GHz band. It also had 6.2 MHz un-liberalised spectrum in the 1800 MHz band expiring in next 5 to 6 years. Recently it had acquired 3.4 MHz of spectrum in the 1800 MHz band in the 2015 auctions. Hence, Videocon's 5 MHz spectrum in the 1800 MHz band will enhance Bharti's LTE capability in Haryana. Bharti also had an alternative option of acquiring 1800 MHz spectrum in Haryana directly through auctions (1 slot of 5 MHz will be available after completion of the harmonization process which is currently in progress).
4.In MP (before this deal), Bharti had 20 MHz LTE spectrum in the 2.3 GHz band. It also had 6.2 MHz un-liberalised spectrum in the 1800 MHz band expiring in next 5 to 6 years. Recently it had acquired 5.8 MHz of spectrum in the 1800 MHz band in the 2015 auctions. This block is currently fragmented, but after harmonization, it will become continuous. Hence, Videocon's 5 MHz spectrum in the 1800 MHz band provides Bharti with an opportunity to make a continuous block of 10 MHz, thereby greatly enhancing its LTE capability in MP. After harmonization in MP, only 4.6 MHz in 1800 MHz band will be available in the future auction.
5.In UPE (before this deal), Bharti had no capability to roll out LTE services. It only had 1 MHz in the 1800 MHz band that too un-liberalised and expiring in next 7 to 8 years. Hence, Videocon's 5 MHz spectrum will enable Bharti's with LTE capability. Bharti had an alternative option of acquiring 1800 MHz spectrum in UPE directly through auctions (1 slot of 5 MHz will be available after completion of the harmonization process which is currently in progress).
6.In UPW (before this deal), Bharti had no capability to roll out LTE services. It only had 6.2 MHz in the 1800 MHz band that too un-liberalised and expiring in next 5 to 6 years. Hence, Videocon's 5 MHz spectrum will enable Bharti's with LTE capability. Bharti had an alternative option of acquiring 1800 MHz spectrum in UPW directly through auctions (2 slots of 5 MHz each will be available after completion of the harmonization process which is currently in progress).
Bharti - Videocon's spectrum trading deal has facilitated other operator's ability to acquire LTE spectrum in the 1800 MHz band in the upcoming auctions.
Bidding strategy (1800 MHz band) in these 6 circles
1. In Bihar (after harmonization) a total of 12.2 MHz of 1800 MHz spectrum will be available in the next auctions. Here Vodafone has 4.4 MHz un-liberalised spectrum (expiring in next 10 to 11 years). It also has 2.5 MHz of liberalized spectrum which it acquired in the year 2012. So Vodafone will need a minimum of 2.5 MHz to complete a block of 5 MHz to deploy LTE. To prevent its GSM network getting congested it might choose to buy more in case the pressure on price is not too high. Similarly, Idea has also 4.4 MHz un-liberalised spectrum (expiring in next 10 to 11 years). It also has 1.25 MHz of liberalized spectrum which it acquired in the year 2012. So Idea will need a minimum 3.75 MHz to complete a block of 5 MHz suitable for LTE. Like Vodafone, Idea might choose to buy more (to prevent congesting its existing GSM network)  in case the pressure of price is not too high. RJIO does not have any spectrum in 1800 MHz in Bihar, so it might try to acquire 5 MHz. Thus, assume Vodafone, Idea and RJIO buy minimum required then there is hardly any spectrum left for anyone else to take. Hence, Bharti acquiring Videocon's spectrum in Bihar will end up reducing the bidding intensity considerably in the next auction for the 1800 MHz band.
2. In Gujarat (after harmonization) a total of 10.8 MHz of 1800 MHz spectrum will be available in the next auctions. Here, Bharti, Vodafone, RJIO, and Telenor already have 5 MHz or more suitable for LTE after the completion of the harmonization process. The main contender for additional spectrum will be Idea and RCOM. Idea already has 1.6 MHz liberalized spectrum which it acquired in the year 2014. Hence, it needs only 3.4 MHz in order to complete 5 MHz. Even if Idea bids for 5 MHz, there will be sufficient spectrum left for RCOM to acquire comfortably. Here as well the bidding intensity will get significantly reduced in Gujarat on account of this deal.
3. In Haryana (after harmonization) a total of 7.4 MHz of 1800 MHz spectrum will be available in the next auctions. Here, Bharti, Idea, Vodafone already have 5 MHz or more spectrum suitable for LTE after the completion of the harmonization process. RJIO currently has only 4 MHz, and hence, they will need an additional 1 MHz to complete 5 MHz. RJIO can buyout RCOM's 0.6 MHz and pick up additional 0.4 MHz in the next auction to complete 5 MHz. So even Bharti picks up 1.6 MHz to complete the 2nd block of 5 MHz (Bharti has 3.4 MHz), and Telenor (or someone else) takes 5 MHz, the 7.4 MHz inventory will be enough for meeting everyone's requirements. Vodafone, Idea staying out will prevent the price increasing disproportionately. 
4. In MP (after harmonization) a total of 4.6 MHz of 1800 MHz spectrum will be available in the next auctions. Here, Bharti, RJIO, Idea will have 5 MHz or more spectrum suitable for LTE after the completion of the harmonization process. Vodafone already has 2.5 MHz of spectrum which it acquired in 2012. In case it acquires 4.6 MHz it will be able to complete a 5 MHz block for LTE and still have sufficient spectrum to prevent its GSM networks from getting congested. Here, the harmonization process more than the Bharti-Videocon deal will help operators like Vodafone to get LTE capability.
5. In UPE (after harmonization) a total of 7.2 MHz of 1800 MHz spectrum will be available in the next auctions. Here, Bharti, Telenor, Vodafone will have 5 MHz or more spectrum suitable for LTE after the completion of the harmonization process. RJIO already has 3 MHz of liberalized spectrum which it has acquired last year (2015), and it just needs additional 2 MHz to complete a block of 5 MHz. Idea needs a full block of 5 MHz. Hence, 7.2 MHz available is adequate for meeting the requirement of both. Hence, Bharti acquiring Videocon's spectrum in UPE will end up reducing the bidding intensity in the next auction for the 1800 MHz band.
6. In UPW (after harmonization) a total of 14.6 MHz of 1800 MHz spectrum will be available in the next auctions. Here, Idea, Vodafone, and RJIO will be additional spectrum for LTE. Here, the harmonization process more than the Bharti-Videocon deal will help operators to get LTE capability.
 Conclusion
 The Bharti - Videocon deal coupled with harmonization will translate into a win-win situation for all operators. It will help them acquire spectrum for LTE at a reasonable price and mitigate irrational bidding. 
(Views expressed are of my own and do not reflect that of my employer)