I’m going to publish series of Articles on the forthcoming Telecom Spectrum Auction in 1800 MHz and 800 MHz band which is an excerpt of the Research undertaken.
Various Telecom Managements have chalked out strategies for the upcoming Spectrum Auction and as a result of the same why do I expect Demand for 800MHz Spectrum at least in 16 Circles, is discussed in this article.
Telecom in India is divided into 22 Circles based on geography and other factors. I categorize them as Top 6 and Bottom 16 Circles based on the Spectrum Reserve Price. [Kindly note that I have adjusted the Reserve Price of TRAI’s recommendation of Rs 18,000 Cr for 5 MHz in 1800 band to Rs 14,000 Cr recommended by Ministers]
Why 800MHz Spectrum should witness Demand from incumbents as well as potential new entrants ?
- Bottom 16 Circles Significance – They have 62% of Wireless subscribers as on June-2012. Reserve Price per MHz in these circles is just Rs 9,801 Mn compared to Rs 26,599 Mn in the Top 6 Circles
- 800MHz in India is primarily used by CDMA based operators for Voice and EVDO based Data services. With rapid advancements in Communication, operators has deployed 800MHz Spectrum for deeper coverage along with BWA / LTE 4G Spectrum together to provide high speed broadband services. With 700MHz Spectrum Auction postponed to 2015, it makes sense for any operator with Mobile / Wireless Broadband dreams to bid for 800MHz Spectrum at least in the Bottom 16 Circles.
- Who are Expected to Bid ? Operators with BWA spectrum – Airtel, Aircel, Mukesh Ambani’s Reliance Infotel and of-course MTS Sistema which wants to be a Data Player.
- Why do I expect demand ? According to auction rules, for 800MHz band, existing operators can top-up by just 1.25 MHz and new operators must bid for at minimum of 2.5 MHz. In approximately just Rs 2,500 Cr you will be able to reach 62% of Wireless Subscribers for Data Services across 16 Circles.
- Feasibility with just little Spectrum ?Going by current spectrum allocation/ utilization of just 2.5 MHz for providing data services by MTS Sistema, it must be feasible for BWA / LTE operators as well.
800MHz Spectrum looks cheap to me in Bottom 16 circles. Stay tuned for more updates on Spectrum Auction and Bid strategies. Feel free to share your thoughts.