telecom-spectrum

How Telecom is heading from Spectrum Crunch to OverSupply ?

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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

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Implications of 800 / 900 / 1800 MHz Spectrum Auction

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Spectrum Auction IndiaThe Empowered Group of Ministers (EGoM) on telecom accepted Telecom Commission (TC) recommendations on reserve prices for 1800Mhz and 900Mhz band spectrum auctions. This would mean that pricing for 1800Mhz and 900Mhz spectrum would come down by ~27% and ~50%, respectively (vs. Mar-13 price)

Do Telecom Operators Have A strong in Case of Spectrum Renewal ?
Telecom minister stated that 900Mhz spectrum will not have reservations for any operator. We do not rule out the possibility of affected incumbent telcos opposing a potential 900 MHz auction, as they may believe that they have the right to extend

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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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Is TRAI Hinting at More Balanced Telecom Regime Ahead ?

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In the aftermath of the 2G Spectrum Scam engineered by Politicians and Cronies in the Congress Party, the near-term positive is likely to be in the form of reduced spectrum prices recommended to the Government. Moreover, with the possibility of penal powers shifting to TRAI (from DoT), the regulatory outlook is likely to improve further. Whilst we do not expect a complete end to punitive actions from the DoT, a

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Implications of Final norms for Unified Wireless Licence

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Mobile Revenues IndiaDoT published the final version of Unified License, which essentially de-links spectrum from a telecom permit/license and allows for all services (Mobile or Fixed Access/NLD/ILD/ISP etc.) to be provided in a single pan-India permit at a cost of Rs150mn.

At present, all telecom service providers except the recent (new) 2G spectrum [1800/800] winners have a mobile or fixed-line license (Unified Access Service License or UASL, which is service-area specific) that allows ICR arrangements involving addition of new subscribers (through sale of SIM cards) on spectrum/network not owned by the licensee. However, recent spectrum winners as well as existing UAS holders due for renewal in coming years

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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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Telecom Spectrum Prices Falling

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Wireless Spectrum prices in India peaked with the 3G auction [2100 MHz] at Rs 33,501m/Mhz (pan- India), driven largely by policy uncertainty around license renewals and future availability. Telecom Spectrum costs since then are rapidly falling and stand at Rs 23,786m/Mhz (pan-India) for the 1800Mhz band. They are likely to fall further since auctions have failed in key markets, which would necessitate a further reduction in reserve prices.

The government is obligated to auction the entire spectrum

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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

2G /3G 4G Spectrum Allocation Map

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There are 8-10 voice operators in India in most circles. In addition, there are four new operators holding the LTE spectrum in the 2.6GHz band. Top operators own 6.2-10MHz of 2G GSM spectrum and 5MHz of 3G spectrum, which is lower than that in most markets. India continues to see double-digit minute growth, and data … Read more