We find that in its 12 largest circles, Bharti Airtel (at avg 20.6MHz) has 40%/50% more spectrum than Vodafone/Idea, even if we exclude Bharti?s 2300MHz spectrum. Even in its 10 smallest circles, Bharti has narrowed the gap with Vodafone and has overtaken Idea. Further, with its average spectrum holdings having gone up by 50% from the last 2 auctions, Bharti should be able to offer data capacity with much better Ebitda margins.
In its 12 largest circles, Bharti has the highest 900 spectrum at 5.1MHz. It also has the highest 2100 spectrum at 5.3MHz (5MHz in
11 circles and 10MHz in TN) In these 12 circles, Bharti increased its total spectrum (after 30% higher weights to 800 and 900) by 7.3MHz in these two auctions, which is the highest among all telcos.
In these circles, Bharti has 25.2MHz including 2300MHz, which is almost 50% higher than that of its nearest competitor. Even if we
exclude 2300 considering its in-building coverage limitations, Bharti?s holding is 20.6MHz vs. 14.6MHz for Vodafone and 13.8MHz
for Idea. In its 10 smallest circles, Bharti had added 6.2MHz in the last two auctions, which is second only to Jio (6.9MHz).
To summarise, Bharti, which already had a healthy lead over others in its 12 largest circles, has further increased this gap. In our view, this would provide it adequate capacity for years to come. High spectrum holding would also result in lower terminal BTS count than earlier, leading to capex and opex saving. In its smaller circles too, Bharti won adequate spectrum, which would help reverse some of its RMS losses and result in improved profitability. Hence, Bharti?s healthy Ebitda growth should continue.
