With none of the operators having pan-India 3G spectrum, there is a clear need for telcos to add 3G / data spectrum. separately the amount of spectrum (mere 5 MHz in 3G) is inadequate for operators in our view, once data demand picks up, although this is likely to take at least 3 years so there is no major hurry. Separately, we are of the view that telcos with 900 MHz may want to use the aforesaid frequency band for 3G, given its better coverage and likely high bidding and reserve price for 900 MHz.
Furthermore, we are of the view that the voice business still has growth left. To accommodate voice growth, telcos will need incremental 2G spectrum. However to pursue this, they will need lots of spectrum in 1800 MHz band. To attempt any such transition, clarity on spectrum re-farming is most critical in our view.