The PAN India 1800Mhz Spectrum and 900MHz Spectrum in Delhi, Mumbai & Kolkata will go under the hammer in the next couple of months. In discussion with Analysts and Telcos [incumbents] we get the following sense that 1800Mhz Auction will be successful, 900Mhz had differing opinion but the consensus is bidding may not be aggressive and Mukesh Ambani’s demand to reject Uniform spectrum Charges likely to be accepted by the Group of Ministers in the Potentially highly Corrupt Congress led UPA Government.
Since the Department of Telecom, India and Telecom Minister Mr. Kapil Sibal are doing a totally unacceptable job with “Failure” Grade Performance, Operators do not have the much needed roadmap on Spectrum and Reforms, thus have no option but to bid and get whatever is available in the 1800Mhz Spectrum in case if they are going to be ripped of their 900Mhz Spectrum with an Ordinance like the Congress led UPA Government has put forth in the Office of the President to nullify the Supreme Court Order banning Criminals from contesting the Parliament Elections.
Operators will seek 1800MHz bandwidth in the upcoming auctions, as a play on strategies for voice-services. Auction participation should be facilitated by the fact that rollout obligations that are likely to accompany such spectrum have already been met by most large incumbent operators while Reliance Jio Infocomm and Videocon Telecom will face an uphill task in meeting the same.
Can you make a Business Case for Reliance Jio Infocomm or new Entrant with 900Mhz Spectrum?
Airtel and Vodafone’s issue of license-extensions is already being litigated in the court of law. Courts are unlikely to adjudicate ahead of the auctions and operators may bid for 900Mhz “under protest” to avoid disruption of business. We’ll discuss in a separate Article n the Dynamics and business case of 900Mhz spectrum for new entrants.
Uniform Spectrum Pricing
Mukesh Ambani’s protest (silently backed by Anil Ambani) using the media on Uniform Spectrum Pricing makes is evident that Congress Politicians are likely to appease Ambani and reject TRAI recommendations. A-Vo-Id Group operators will have to shell out more as Uniform Spectrum Charges. We’ll be surprised if the Government accepts TRAI recommendations in its entirety.
Data and LTE
Three years after the auction of 3G Spectrum data services uptake has been tepid. You can also blame the economic slowdown as a confluence of higher smartphone penetration and deeper network rollout by operators is required for the eco-system to progress; one without the other is unhelpful in accelerating growth. Pricing of data-services is inter-dependent on factors like customer profile, network roll-out and device pricing; hence, data pricing will continue to evolve as the market grows.
Airtel is the only operator who has rolled out 4G LTE Services and admits that business case for LTE in India is still distant. Tikona and Reliance Jio Infocomm are caught on the wrong foot with 2.3MHz Spectrum requiring very High CAPEX and No sight of VoLTE / Device eco-system. Aircel is working in the backdoor to either move aggressively or even sell-off some parts of the business.