1800mhz-spectrum-auction

Airtel Biggest Beneficiary of Lower Spectrum Usage Charges

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Airtel IndiaCurrently in India, the current spectrum usage charges (SUC) is escalation based on spectrum holdings. On average, operators pay SUCs in the range of 3.6% to 5.6% of adjusted gross revenue (AGR). We believe that lower SUCs (if implemented) will partly offset the spectrum renewal charges to be paid by the operators at the time of licence renewals. Airtel pays the highest SUCs in the industry and would be the biggest beneficiary of a lower SUC regime. In a scenario of a flat 3% SUC (as recommended by the TRAI), Airtel’s potential NPV benefit is Rs20/sh (vs. Rs39/sh for spectrum renewal charges). However, if a flat SUC is pegged at 5%, then the potential benefits for Bharti and Idea will be reduced to Rs5/sh and Rs1/sh, respectively.

Despite significant Reserve Price cut

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Telecom Spectrum – Hot Topic for Rest of 2013

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The TRAI has invited Public Comments on the Auction of Telecom Spectrum in India. Incumbents led by Vodafone faces the expiry of its main 900 and 1800MHz licences in India late in 2014 along with the ongoing tax demand for CGT on its original acquisition which remains unresolved. Vodafone is arguing that the spectrum licences entitle the holders to renewal, a point it is making in court, but it is also engaging in government plans for an auction which could be held late this year. Currently the regulator is considering the reserve pricing of the spectrum and given failed auctions earlier in the year we expect a recognition that the pricing of the 3G auctions was not the right reference point and that reserve prices will be reduced.

Uncertainty remains over whether Vodafone, Airtel and Idea will be allowed to use each others’ spectrum for 3G intra-circle roaming which has

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What does Vodafone Offer for Spectrum Renewal Mean to Indian Telecom Sector ?

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Vodafone Offer for Spectrum RenewalVodafone recently offered some terms and conditions to govt. for renewal of its licence/spectrum in three circles that expire in 2014. Prices offered are at a ~75% discount to last (failed) auction prices, along with a reduction in annual spectrum fee. Importantly, Vodafone believes 900MHz should be 1.3x. 1800Mhz. Vodafone’s offer for the 20-year renewal is as follows

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TRAI for Reduction in 900MHz Spectrum Pricing & Data Tariffs

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TRAI IndiaMs. Anuradha Mitra, Principal Advisor (Financial & Economic Analysis), Telecom Regulatory Authority of India (TRAI) met Telecom Industry Analysts and here are some of the feelers the officer has given during the interaction.

The regulator indicated that failure of two auctions has given a reason to re-think the spectrum pricing mechanism. Also, the flat 2x multiplier to derive the price of 900Mhz spectrum across circles could be tweaked to adequately capture the benefits of more efficient spectrum depending on circle dynamics.

The recent reduction in data tariffs

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Indian Government Must allocate More 3G Spectrum

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Along with relatively inferior 3G spectrum, high population density in India and relatively less amount of spectrum with each operator is also likely to necessitate higher number of towers. Indian telecom operators own very low amount of 3G spectrum, resulting in a need for higher number of towers due to spectrum scarcity. Telecom operators in … Read more

2G GSM Spectrum / License Expiry in Next 3 Years

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Since the expiry date for licenses in several circles will come up in Nov-14, the government will have to take the decision for auction of renewal spectrum prior to that. The following Chart Shows License / Spectrum Expiry Dates for Incumbents – Airtel, Reliance GSM, Vodafone, and Idea Cellular in the next 3 years 900MHz … Read more

Government May Miss Spectrum Collection Target Yet Again

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For FY14, the government is looking to raise Rs 400 bn from the telco sector (both recurring revenue and one-off payments). As per the budget document, the one-off payments relate to receipts from auction of 1800, 900 MHz & 800 MHz and one-time spectrum charges as recommended by TRAI. We estimate the targeted one-off amount … Read more