What was Idea’s idea behind procuring 2500 MHZ Spectrum ?

idea-spectrum-in-2500mhz-bandThe Executive strategy team at Idea Cellular acquired capacity bands, citing two reasons: 1. They wanted to be competitive in their leadership circles and offer best services. 2. In the non-leadership circles, they were able to acquire spectrum by spending a modest Rs. 5-7bn, which enables them a good hedge for small spends.

On 2500MHz ecosystem, Idea Cellular said that since now China has allocated 2500MHz, the deployment is expected to be fast. Additionally, they want to procure ultra-band radio, which would span across 2300 and 2500 spectrum. [Follow the Leaders – China Mobile ?] Idea said that its focus was more towards the rural areas where it is strong. Top 5 metros have heightened competition, and the revenues from the spectrum do not justify the reserve prices of the spectrum. Idea is not focusing in the 5 metros, which makes only around 10-12% of revenue market.

The management hiked the capex guidance to Rs. 80bn for FY-17. Idea said that this would be the peak capex for them, and they would not look to exceed this organic capex going forward. With optimization and deployment of second carrier, Idea expects the capex intensity to fall going forward. Idea expects to reach 110-115k sites by the end of the year. This 80bn assertion of peak capex does not include any decrease in capex as a result of sharing.

Idea management also thinks that 700Mhz Spectrum Auction is now pushed ahead by 2 years sticking to the line they toed during TRAI consultation where they wanted it to be deferred by few years.

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