Largest Telecom Spectrum Auction Announced – Big Blocks in 2.0GHz+ on Sale

The Indian Department of Telecom (DoT) has put out the Notice Inviting Application (NIA) for auction of seven spectrum bands starting from 29th September 2016. The spectrum bands include 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz constituting a total of 2356 MHz spectrum with the largest chunk in the 700MHz band. This auction is the Largest ever Telecom Spectrum auction till date in terms of quantity, quality and price of spectrum being put on

Read more

DoT & TRAI Differ on Minimum Block Size for Feb 2015 Auction

TRAI had recommended a minimum bid block size of 3.6 MHz for 900 band spectrum versus the 5 MHz bid block size stipulated for the Feb 2014 auctions. The DoT argued that there has been no change in market dynamics since the Feb 2014 auctions and hence there is no need to change the minimum bid block size.

The TRAI, rightly noting the limited availability of spectrum in these auctions and the much-higher possibility of irrational/tactical bids with a 5 MHz bid block size, has reiterated its earlier recommendation of keeping the minimum bid block size at 3.6 MHz (for all circles except West Bengal where the TRAI recommends 2.4 MHz noting availability of only 4.4 MHz spectrum in

Read more

1800MHz Spectrum Frenzy – Operators Betting Big on Data

4G LTE IndiaDespite ample supply at the 14 February auction, prices in 1,800 MHz reached INR 22.7bn/MHz, 29% over the reserve price. Prices for 900 MHz in Mumbai/Delhi Kolkata rose an average 2.3x the 1,800 MHz price. Both prices were higher than we anticipated. Demand shot up mainly because of (1) incumbents’ eagerness to corner 1,800 MHz for 4G / LTE and de-risk their 900 MHz holdings; (2) Reliance Jio’s demand for 5.0-6.6 MHz across 14 Metro / A-category circles. Reliance Jio Infocomm’s entry is not worrisome, but the industry may have overpaid for data potential.

Idea Cellular’s Love for 900Mhz Spectrum
Though Idea’s acquisition of 5 MHz in the 900 MHz band in Delhi makes it slightly better positioned for 3G data, the company is still short of data spectrum, in our view, despite aggressive participation in the 1,800 MHz band auctions. We also think that Idea has tried to de-risk the upcoming 900 MHz auctions in its key

Read more

Reliance Jio Infocomm 1800MHz Spectrum Win Confirms Takeover of Videocon Telecom

Breaing NewsThe 1800Mhz Spectrum Auction comes to an end with Reliance Jio Infocomm winning 14 out of the 22 Circles. R-Jio has won 5MHz-7MHz of 1800MHz spectrum in 14 circles for a total investment of ~Rs111bn. We believe it would look to complete the pan-India footprint in 1800MHz (to be used for 2G voice) through acquisition Videocon Telecom.

The Circles where Reliance Jio has bid and won the Spectrum complement the circles where Mukesh Ambani backed Videocon Telecom has already secured

Read more

Telecom Spectrum auction is getting competitive

The ongoing spectrum auction has become competitive for the 900Mhz band spectrum, which is on offer in the three metros (Mumbai, Delhi, Kolkatta). The incumbents currently hold spectrum primarily in 900Mhz band and would lose access in Nov 2014 if they fail to win it back in the auction.

In the 900MHz band, cumulatively Mumbai has witnessed the highest price escalation of ~72% over the reserve price. Delhi/ Kolkata have recorded 59%/ 54% appreciation in bid price over the three days. 900MHz price for all three metros are in the range of 2.6-2.7x 1800MHz prices for these circles.

Read more

Reliance Jio Competes Airtel, Vodafone for 900 + 1800MHz Spectrum

Reliance Jio Infocomm LogoFor the 1800MHz band, a new entrant needed to deposit Rs19.2b to be eligible for pan-India spectrum while in the 900MHz band this was Rs4.4b for the circles of Delhi, Mumbai and Kolkata. Reliance Jio Infocomm Ltd has furnished higher than the required INR23.6bn bank guarantee (INR19.2bn in 1800MHz and INR4.3bn for 900Mhz), indicates that it may bid for pan-India licence in 1800MHz and also for three circles in 900MHz. We believe the company’s strategy in auctions could be the differentiating factor in terms of aggressiveness in the bidding process.

Airtel and Vodafone have deposited INR37bn and INR28bn, respectively. Idea has submitted a bank guarantee of INR 15bn; others, including RCOM, Tata Teleservices, Aircel and Uninor have reportedly submitted total bank guarantees of over

Read more

Why Reliance JIo Infocomm will Bid in Spectrum Auction ?

Airtel , Vodafone, Idea Cellular (Idea), Reliance Communications (RCOM), Reliance Jio (RJIO), Tata Teleservices (TTSL), Aircel and Uninor have submitted applications for participation in the 900MHz and 1800MHz auctions to be held in February 2014. The previous auction (March 2013) had failed to elicit any response due to the high reserve price and stretched financials of operators. The February 2014 auctions were anticipated to receive better participation and aggressive bidding (in select circles).

The recent deal between RJIO and Airtel, which has accelerated the former’s rollout plans, could heighten competition in the upcoming auctions. However, even post availability

Read more

Delhi will witness heated Auction of Spectrum from Airtel, Vodafone, Idea, Uninor & Videocon

Spectrum Auction IndiaA steep cut in Delhi Circle’s reserve price makes it an attractive circle for new licensees. Our framework for new licensees suggests NPV remains positive till 50% higher spectrum prices. IDEA without 3G spectrum could be an aggressive bidder in Delhi. Spectrum prices may rise more than 50%, if incumbents want to deny IDEA 3G spectrum in Delhi.

A significantly lower reserve price compared to the market size, indicated by the high industry revenue / reserve price for the 1,800MHz and 900MHz bands.

Read more

How Telecom is heading from Spectrum Crunch to OverSupply ?

The Indian telecom industry has historically suffered an acute shortage of spectrum. The abysmally low absolute quantum of spectrum is compounded by highly fragmented spectrum holdings. TRAI’s recent recommendation and attempts by the telecom ministry to free up commercially unused 2100MHz spectrum indicates a new found feeling within the govt that ‘spectrum unsold is revenue lost’. Increasing the quantum of 1800 Mhz to be auctioned seems to be the first step in this regard.

Spectrum Allocation in the next 3 – 5 years
In light of recent developments, keeping

Read more

Reliance Jio Infocomm Likely to Bid in upcoming 1800Mhz Spectrum Auction

Reliance jIo Bid in AuctionReliance Jio Infocomm has objected to the telecom regulator’s recent recommendation of an uniform spectrum usage charge of 3% of revenues after 1st April 2014, for all spectrum acquired through an auction. Reliance Jio is the telecom venture of Reliance Industries. It acquired 20Mhz pan-India spectrum in 2.3GHz band through an auction in June 2010 at a price of Rs128bn. The spectrum carries a charge of 1%.

Reliance Jio had acquired

Read more