It is important to know the Principle on Which Operators Bid in Telecom Spectrum Auction. I'm sure most of you wouldn't know and here is the strategy which is most important upon which the Spectrum Bidding Model is constructed.
A useful model is to think about value of spectrum in terms of a financial value and a strategic value. Spectrum is essentially a substitute for future capex and leads to lower opex - hence telecom companies can estimate the "financial value" to a reasonable extent. The "strategic value" comes from minimizing risks of renewals, regulatory changes or constraining competition. It is more difficult to estimate strategic value in a spectrum auction. However, we believe the current auction offers low strategic value - there is no renewal risk for incumbents and spectrum purchases are unlikely to constrain competition materially.
