2G License + Spectrum; Some Predictions come TRUE

Reliance Communications was the luckiest in this round of battle. DoT issued PAN India GSM license to RCom + HFCL + Shyam Tele. IT ministry also accepted the DoT’s guidelines for crossover of technology [GSM / CDMA]. Another blessing for Reliance communications is that the deal is effective in retrospective date which now make is the number one contender for GSM spectrum.

It’s now time for some self-praise. On the 27th of last month I had written,

This time GSM operators will be told to use better mix of GSM technology to make the best use of spectrum.

Additionally, I had written,

IT ministry will have no choice but to auction fresh spectrum….. fresh spectrum will be atleast thrice as more expensive….

I am right about recommendations being given to GSM operators. DoT has suggested that GSM operators have to squeeze in more number of subscribers per MHz of spectrum. Earlier they could walk away with 10MHz with mere 6 lakh subscribers, now an operator has to have 2 Million subscribers on his billing rolls to get 10MHz.

I am wrong about the Spectrum Auction, because they have ruled out auction of 2G spectrum. But I am hopeful, if 10% of 300+ applicants for the spectrum are genuine and really serious, then auction will be the only way out. However, companies like VaVasi Telegance should be encouraged because it is taking a different route.

I am partially right about spectrum being expensive. In a way of speaking, fresh spectrum is thrice as more expensive [Interpreting conversely, 10MHz for 0.6 Mn subscriber is now changed to 10MHz for 2 Mn subscribers] I am partially wrong because I was seeing Spectrum as an asset valuation into the stocks of Bharti Airtel and Idea Cellular, which is not going to happen now 🙂 This may discourage Indian Land Lords in the Telecom race who are Billionaires by virtue of holding land and not creating wealth like others did.

Stay tuned, the battle has just begun. Sunil Mittal maybe back in the driving seat at Qutab Ambience to save and grow the empire he built.

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