Incumbent operators Airtel, Vodafone and Idea Cellular have been able to defend their turf by winning spectrum in all the circles where their licences are set to expire this year. Though this has come at a high cost, the three companies have also been able to buy additional 3G spectrum, which will help them offer pan-India mobile Internet services.
Aditya Birla Group’s Idea Cellular emerged as the highest bidder in the spectrum auction, which concluded on Wednesday after attracting bids worth ₹30,306 crore. Bharti Airtel, the country’s largest telecom services provider, came second with bids worth ₹29,130 crore, while Vodafone India was third with bids worth ₹25,959 crore.
Arch-rival Reliance Jio was unable to challenge the incumbents and did not win any spectrum in the 900 Mhz band. But it cornered a large chunk of the 800 MHz band and some part of the 1800 MHz band with bids totalling ₹10,077 crore.
These wins will ensure that consumers can expect high-quality data services.
In a release, Mukesh Ambani, Chairman and MD of Reliance Industries Limited said: “Jio’s seamless 4G services using multi-band LTE technology and supported by our large spectrum footprint will provide a superior user experience for voice, video and data services.”
On Thursday, the Supreme Court permitted the Government to declare the auction details.
However consumers may have to pay higher prices as operators try to recover costs. “The auction design and the scarcity of spectrum have resulted in exorbitant bids to secure spectrum,” said Gopal Vittal, MD & CEO (India & South Asia), Bharti Airtel.
Expect marginal increase The government maintained that the increase in tariffs will be marginal. “The spectrum will be with operators for 20 years. As per the analysis, the yearly load on telecom operators is going to be about ₹5,300 crore, which means an increase of only ₹1.3 paise per minute call,” said Telecom Minister Ravi Shankar Prasad.
Prasad did not lose out on the opportunity to score political points. “I would like to say one thing to my esteemed predecessors, who talked about zero loss: if they had done what I have done, they would have got the same result.”
While eight bidders had participated in the auction, Uninor was the only one that could not win any spectrum.
Reliance Communications failed to defend its existing holding in the 900 MHz spectrum in five out of the seven circles. It did manage to get spectrum in the less efficient 1800 Mhz band.
RCom’s loss was Tata Teleservices’ gain as it won spectrum in the 900 MHz band in 5 circles.
In all, 470.75 MHz was put to auction in various Licence Service Areas (in the 800, 900, 1800 & 2100 MHz bands) compared with 390 MHz in November 2012 and 426 MHz in February 2014.
The spectrum was sold at about a 68 per cent premium and as per the base price fixed by the Government.