900mhz-spectrum-auction

2015 Spectrum Auction Implications – Entry Cost Rises, Tariffs Look Up

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The mega 2015 spectrum auctions finally concluded after 19 days and 115 rounds of aggressive bidding. The Clearing Prices are as shown in this chart.

Entry Cost for Wireless Operators Rise Significantly in India
Even as most of the challengers (barring RCOM) did not face spectrum renewals in these auctions, their medium-term prospects of survival in the Indian wireless market just got bleaker, in our view. High spectrum prices are now a reality, for all operators, irrespective of their revenue market share. Spectrum pricing has now hit a level where even the most efficient operators

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Why Airtel / Vodafone / Idea Won’t Overbid in 2015 Mega Spectrum Auction ?

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2015 900Mhz Spectrum Auction 8 operators have submitted applications to participate in the bidding for the 2015 Mega Telecom Spectrum Auction. Reliance Jio is the surprise entrant with highest earnest money deposit (EMD) thus creating the fears of aggressive bidding. Idea cellular will be the most vulnerable if Reliance focuses on winning the 900MHz band Idea doesn’t have enough fire power to bid up if the process turns aggressive as the capability is limited by the EMD paid and may have to take an alternative path to the 2100 Mhz spectrum.

Why will Airtel / Vodafone and Idea Cellular Avoid Overbidding ?

I will renew my 900 MHz renewal spectrum at any cost

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Idea’s Risk of Spectrum Renewal in 2015 Auction, LTE Delay A Risk ?

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Idea Spectrum Renewal ChallengeIn the upcoming 2015 mega spectrum auctions, Idea Cellular has 900 Mhz spectrum up for renewal in 9 circles accounting for about 72% of Idea’s last twelve month (LTM) revenues. In 2 circles (Gujarat and UP (West)), Idea has almost no back-up spectrum to offer voice services and about 15% of its revenues from these circles would be at high risk if it is unable to renew the spectrum.

In the upcoming spectrum auctions in February 2015, 59 MHz of 900 MHz and 9.2 Mhz of 1800 Mhz frequency of Idea are coming up for renewal. If we take DoT reserve prices as the auction price, we expect total renewal outgo to be Rs172 bn for Idea following the auction.

Idea has significant gaps in its

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

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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

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How Many More 3G Operators can be Accommodated in 900Mhz Spectrum Band ?

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Contiguity is the key factor for the launch of 3G services and a minimum requirement for a successful rollout. We look at availability of extra spectrum across the circles (including surrender of spectrum from BSNL) and the corresponding contiguous blocks.

We note that in six of the 18 circles, there is a creation of an additional block of 5Mhz thereby allowing each of the top-three operators to gain presence in the market. On the contrary, in other circles, for example in Madhya Pradesh, either of the top-three is capable of winning, while

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1800MHz Spectrum Frenzy – Operators Betting Big on Data

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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

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Idea + Vodafone Go OverBoard to Acquire 900Mhz Spectrum in Metros

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idea cellularThe 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

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Telecom Spectrum auction is getting competitive

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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.

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

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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

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Why Reliance JIo Infocomm will Bid in Spectrum Auction ?

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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

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