1800Mhz Spectrum Auction Results as Expected; Vodafone Surprise Buyer rather than Idea Cellular

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The Results of 1800MHz Spectrum Auction 2012 are as I had expected – Failure in Delhi, Mumbai, Karnataka etc. Other important highlights of the Auction are as follows,

  • Of the 18 circles that saw bids, the winning price did not exceed the reserve price for 17 circles, means Demand was Less Than or Equal to Supply.
  • Only Bihar saw excess demand and thus the price discovered was 9.2% higher than reserve price
  • Telenor [erstwhile Uninor] secured 5 MHz of spectrum in Andhra Pradesh, UP(East), UP(West), Bihar, Gujarat and Maharashtra by paying Rs 40.2 bn. The company will cease operations in circles Mumbai, Kolkata and West Bengal, where it was not awarded licenses. Telenor has evinced interest to operate in the lucrative Mumbai circle and will probably bid again once the reserve prices are lowered.

  • Videocon likely backed by Mukesh Ambani’s Reliance Infotel behaved rationally and managed to win 5 MHz in Gujarat, Haryana, UP(E), UP(W), MP and Bihar. With limited footprint and greenfield operations it may not be able to compete intensely at these tariffs.

Vodafone the surprise BUYER in 14 Circles and not Idea as I expected
With the kind of EMD Idea Cellular deposited with the DoT, I expected Idea Cellular to pick and add 1 or 2 blocks of spectrum each of 1.2 5MHz in 1800MHz band to its existing base. However, instead of Idea Cellular, Vodafone surprised us by picking additional spectrum in 14 circles – Maharashtra, Haryana, Kerala, MP, Punjab, UP(E), UP(W), West Bengal, Assam, Bihar, HP, Jammu & Kashmir, North East and Orissa. Idea Cellular won 5MHz in all the circles (Kolkata, TN, WB, Orissa, Assam, NE and J&K) where its licenses were cancelled, along with one additional block in the Bihar circle.

The entire Spectrum Allocation Chart of 1800Mhz Spectrum Auction 2012 is shown here. Operators can use spectrum obtained in this auction for providing any service 2G Voice or 4G LTE without any restriction. So is Vodafone planning a LTE Data Strategy since its MVNO partner MTS is embroiled in a legal battle for 800Mhz Spectrum ?

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