Telecom users will get more options for accessing data services albeit at higher price with mobile operators winning spectrum in crucial bands. The spectrum auction, which ended after 10 days of intense bidding, has thrown up Vodafone, Airtel and Reliance Jio as clear winners giving these operators spectrum that can be used for high-end data services using 3G and 4G technologies.
The big winner is Vodafone, which has managed to bag 900 MHz spectrum in all three circles in addition to airwaves in the 1800 MHz band in eight circles. Airtel managed to retain its existing holding in the 900 MHz band in Delhi and Kolkata and acquired new spectrum in Mumbai.
Reliance Jio has acquired about 5 MHz spectrum in the 1800 MHz band across 14 circles. Reliance Jio will be able to use the newly acquired airwaves along with its existing spectrum in the 2300 MHz band to offer 4G services. However, RJio could not push out incumbent players from the 900 MHz band.
Of the eight bidders in fray, only Tata Teleservices drew a blank. Reliance Communications managed to win 0.6 MHz in Mumbai.
The biggest winner, however, is the Government which stands to get ₹61,162 crore. This is 44.4 per cent higher than what it would have got had all the spectrum been sold at the reserve price. But since the operators have been allowed to pay the bid amount over a ten year period, the Government will get a minimum of ₹18,296 crore this fiscal.
Telecom companies said that they were happy with the outcome of the auction in terms of service capabilities but expressed concern over the financial impact. Marten Pieters, CEO, Vodafone India, said, “We have opened the door to the next generation of mobile technology, 4G, but much of it (bid amount) will end up as debt on the balance sheets of the mobile operators. Such high industry indebtedness will hurt operators’ ability to invest in the roll out of new technologies and invariably result in higher prices and reduced service levels for consumers”.
Airtel said its spectrum acquisition is in line with its strategy of building a robust network of the future. The company plans to roll out high-speed 4G networks in various circles using the 1800 MHz band.
Gopal Vittal, Joint MD and CEO – India, Bharti Airtel, said: “The auction has provided much needed long-term certainty and clarity around spectrum and other regulatory policies. However, future auctions should ensure that more spectrum in the 900 MHz band is secured from other agencies and the operators who are grossly underutilising this important spectrum band.”