The 1800MHz and 900Mz auctions finally concluded yesterday with incumbents stealing the show with mega spectrum wins across the country. Airtel, Idea and Vodafone that have immensely strengthened their data arsenal. While the bidding seems to be stressing the valuation for the telecom companies but we believe the auctions have clearly demonstrated the direction for further consolidation in the industry. We strongly believe that the significant acquisition of spectrum assets by the incumbents will help them in offering superior QoS and raising tariffs in the medium to long-term.
Vodafone Bets Big on Data in Metro Circles
Vodafone has acquired significant amount of spectrum in the metro circles. Vodafone has bought 11MHz of 900 MHz and 8.2MHz of 1800 MHz spectrum as compared to its existing 8MHz in 900MHz and 2MHz in 1800MHz. Apart from Mumbai, Vodafone has acquired 5MHz and 8MHz in 900MHz and 1800MHz bands respectively in Delhi and 7 MHz and 8MHz in 900MHz and 1800MHz bands respectively in Kolkata. Apart from the metros Vodafone has acquired spectrum in 8 circles in 1800 MHz with Kerala and Karnataka being the significant acquisition of 7MHz and 5MHz respectively.
Idea Cellular’s Big Bet on 3G Data in 900MHz Band in New Delhi
Idea surprised us in the auction by buying 5MHz of 900MHZ band contiguous block in the highest priced and the most profitable (has highest RPM in the country) circle Delhi. Idea has won contiguous 5MHz blocks of 1800MHz band in its 8 leadership circles which account of 64% of its total revenues. While Idea has acquired significant amount of spectrum to enhance its data capabilities we believe that the company’s spending has been over budget.