TRAI has recommended auctioning 700 MHz spectrum (7 blocks of 5 MHz each) along with spectrum in other bands (800, 900, 1800, 2100, 2300, and 2500). TRAI has recommended auctioning all spectrum available with the DOT and some more. Recommended reserve price for 700 MHz spectrum is US$8.5 bn for a 5 MHz block across all 22 circles. Most Telecom Operators including Reliance Jio and Airtel have responded to defer the auction until ecosystem is developed for the same. TRAI has proposed a 4X 1800 reserve price for spectrum in the 700 MHz band. It has also Continue reading Will Telcos BUY 700Mhz Spectrum at TRAI’s Recommended Auction Price ?
I was always of the Opinion that the BJP Government headed by Narendra Modi meant strict Governance & Business. However, the Telecom Spectrum Auction Design appears to be flawed and now I’m beginning to wonder if the Honorable Supreme Court Justice sensed the flaw and potential vested interests and passed an order to DoT that Auction results shall not be declared without the consent of the Apex court. Continue reading Why Narendra Modi Led Govt Designed Flawed Telecom Spectrum Auction ?
Evey body was caught with a surprise when DoT revealed the earnest money deposits for the 2015 Mega Spectrum Auction as Reliance Jio turned out to be the highest depositor. Mukesh Ambani led Reliance Jio Infocomm already has a) Pan India 4G-BWA Spectrum in 2300 MHz band of 20 Mhz block bought 5 years ago and is yet to launch operations. Subsequently, Videocon backed by Mukesh Ambani bid in the b) 1800 Mhz spectrum band in 2012 auction and managed to win some circles. In 2014, Reliance Jio once again surprised every body by c) winning 1800 Mhz spectrum in more circles. All the Spectrum bought in an Auction is Liberalized (Deploy any technology for commercial use) The following map shows the Spectrum bought by Videocon & Reliance Jio Infocomm in the 1800 Mhz Band of at least 5 Mhz bandwidth mapped on to the Geographical Map of India.
Why is Reliance interested 1800 Mhz Spectrum ?
The 1800 Mhz band is commercially viable for FDD-LTE and has deployments across the globe in several countries far more than the 2300 Mhz band. With 1800 Mhz they can also have 2G Voice call coverage which is made possible by CSFB. Reliance Jio has quietly accumulated spectrum for the forthcoming decade of mobile broadband boom. From the above map it is clearly evident that Reliance Jio Infocomm will be a serious bidder for 1800 Mhz Spectrum in Rajasthan and Himachal Pradesh where the availability is more than 5 Mhz.
Agreed!!! But why such a massive $800 million deposit for just 2 circles of 1800 Mhz ? We were the first one to think and publish that Reliance Jio would bid for 900Mhz in the previous 2014 auction, but they let go the spectrum in India’s most profitable circles Delhi NCR & Mumbai. So this time around we are of the opinion that Reliance Jio will bid for the 800 Mhz Spectrum.
Is 800 Mhz Spectrum Best suited for Reliance Jio ?
800 Mhz spectrum is priced cheaper compared to 900 Mhz band, inconsistent with the Physics & Mathematical model of Spectrum efficiencies. 800 Mhz is best suited for running a LTE network with less CAPEX and High Coverage. One of the conditions laid out by the DoT is a new Entrant will have to bid for a Min of 5 MHz wherever available. We think it is the least, an operator must have to offer Mobile Data services and thus Reliance Jio would end up bidding in the circles highlighted on the Geographical Map of India.
Why won’t Reliance Jio Bid for 900 Mhz ?
The 900 spectrum put to auction is renewal spectrum of incumbents and they are unlikely to let it go. 900 band is best suited for 2G Voice & 3G mobile data but not for 4G LTE. Idea has openly declared 4G is few years away, implies the thrust is on 3G mobile data for now. However, low EMD leads to think that Idea has 2 bid scenarios on mind. Additionally, the difference between 900 Mhz and 2100 Mhz reserve price is not considerable, thus incumbents have developed models where the threshold until which they can chase 900 band or switch to 2100. In this backdrop, if Reliance Jio does bid and win 900 band spectrum, it will end up paying a FORTUNE. Incumbents will switch to 2100 band and the battleground will shift to 3G mobile data pushing 4G LTE couple of years ahead.
We really never know what works in India as evident from – “It happens only in India” messages 🙂 So Airtel could experiment by bidding for a circle of 800 Mhz spectrum to deploy LTE as it is the only service provider which provisions differently based on customer needs delivering high QoS. Anxiety is running high, let the Auction conclude soon and pave way for a highly connected India. What say ?
The Department of Telecom (DoT) conducted a pre‐bid conference for addressing the queries and concerns of the stakeholders for the upcoming 800, 900, 1800 and 2100 MHz mega spectrum auction in Feb 2015.
One of the major points of discussion was the block size of 5 MHz for 900 MHz band where TRAI (Telecom Regulatory Authority of India) had Continue reading Incumbents Oppose DoT’s 900MHz Spectrum Block Size in Pre-Bid Conference
The Narendra Modi led BJP Government has moved swiftly to conduct the Largest Telecom Spectrum Auction across four bands 800MHz, 900MHz, 1800MHz and 2100MHz in India beginning Feb-25-2015. After a series of Scams during the Corrupt Congress regime and a headless move to impose retrospective tax on Vodafone with constitutional amendment had severely deteriorated the Telecom Sector reforms. Clarity on 2100MHz spectrum availability/ reserve price, etc is awaited – we hope that TRAI recommendations are adopted in this case. Unavailability of sufficient spectrum in the 2100 MHz band could lead to more intense competition among operators, especially for the 900MHz band. Continue reading Narendra Modi Govt Swiftly Moves for Largest Telecom Spectrum Auction- High Reserve Prices
In our view, operators will look to expand their 3G footprint wherever possible in the forthcoming 900MHz Spectrum Auction.
The key factor here would be to check if the operator already holds 3G spectrum in the 2100Mhz band. If so, their incentive to bid for 900Mhz could be lower. The TRAI recommendations suggest that DoT should auction the remaining 60Mhz (paired) of spectrum in the 2100Mhz frequency. This should help in creating visibility around 3G services across operators. However, we assume that this is not happening in the immediate foreseeable Feb-2015 Auctions. Continue reading Airtel, Vodafone, Idea to Expand 3G Footprint via 900MHz Spectrum if Reliance Jio Skips 2015 Spectrum Auction