Idea Keen on Renewing 900MHz Spectrum During Next Auction, Shrugs 4G-LTE Threat

Idea Cellular Management MeetIdea Cellular CEO Mr Himanshu Kapania and CFO Mr Akshaya Moondra hosted an Analyst call in which they highlighted the company’s strategy going forward.

On Spectrum
First, the company believes it is important to have a data offering for customers in the metro markets, and Idea’s top preference was Delhi. Idea chose Delhi because one additional block of 5Mhz spectrum was available, it is the No 3 operator by revenue market share, and it could become the only operator to offer 3G services on 900Mhz spectrum.

In the recently concluded Spectrum Auction, in some of its strong circles, Idea bid for 5Mhz contiguous block of 1800MHz spectrum, which can be used to offer LTE services and could also reduce business risk at the time of spectrum renewal. Third, Idea has acquired excess spectrum beyond 5Mhz in some circles, in order to offset a pay-out which otherwise would have happened at the time of spectrum renewal.

Management believes there will be no irrational competition in the 900Mhz auction, and it is confident that idea will be able to retain 5Mhz spectrum in the 900Mhz band in all of its nines circles. Idea believes there is a possibility of new entrants in circles where additional 5Mhz slots are available. However, for circles where there are no additional slots, the incumbents should be able to renew their spectrum. At the time of renewal, Idea might only buy 5Mhz of spectrum in the 900Mhz band and might give up spectrum in excess of 5Mhz.

On 4G LTE in India
4G LTE impact is still two to three years away; Idea plans to continue to invest in 2G/3G networks as the company is per-dominantly having operations in rural areas.

Idea believes that if the new government announces the following policies, it could be positive for the industry: 1) allow 3G intra-circle roaming; 2) release of some of the spectrum held by the Department of Defence, 3) rationalisation of penalties currently being levied by the Department of Telecom.

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