900mhz-spectrum-auction

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

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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.

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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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Tariff increase – what is different compared to increases in mid-2011?

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Indian Mobile operators raised tariffs in June 2011 which led to an increase in RPM in subsequent quarters. However a tariff war and RPM pressure returned and tariff hikes were not sustained. Many Investors questioned us on how the recent industry actions of lower discounting and raising RPM compared to 2011.

Not only had industry financials deteriorated from 2011, there is the pressure of significant regulatory costs faced by all operators. Industry over capacity is getting addressed as new entrants as well as existing operators (like Tata and Aircel) are shutting cell sites/circles selectively.

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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

Airtel Vodafone Knock Delhi High Court to Retain 900MHz Spectrum

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Airtel and Vodafone have filed a case in the Delhi High Court, challenging the government’s plan to auction 900Mhz spectrum. They have taken this legal recourse stating that they have the right to extend the current contract by another 10 years. Notably, 900Mhz and 1800 Mhz spectrum is coming up for renewal by end-2014 for … Read more