With the release of one block in the 2100 spectrum likely, telcos will need to evaluate between the 900 and 2100 bands. The question will be more relevant for telcos not facing renewal in the 900 band in a particular circle as for them both options will be applicable with no obligation to renew the 900. In our view, the spectrum price will be only one of the elements and other factors such as better coverage (resulting in lower opex and capex) and robust in-building coverage (more so as getting permission for new towers is not easy) will play a role too. Separately we think GSM new entrants (such as Uninor (NR) with no data spectrum at all) may consider bidding for spectrum in the 2100 MHz band.
In our view, the telecom ministry may not find it easy to release more than 5 MHz of spectrum in the 2100 band (as supply may exceed immediate demand and dilute monetization). Further, in our view, the DoT may decide to revise up the reserve price for 2100 spectrum band (the price for the 2100 band may be fixed at par with the 2010 auction price, in our view). Nevertheless even if one block of spectrum in the 2100 band is made available and the auction of the 2100 band takes place simultaneously with the 900 spectrum auctions
