Idea Cellular has announced purchase of 5MHz paired spectrum in the 1800MHz band in Gujarat and UP (West) circles from Videocon Telecom for INR 33.1bn. This purchase will enable Idea to launch 4G in these 2 circles (currently contribute 14.4% to revenue). Idea is the No. 1 operator by revenue market share in UP (West) and No. 2 in Gujarat, which may have necessitated 4G services to ensure that existing customers do not migrate to competition offering Continue reading Videocon Makes Killing Selling 4G-LTE Spectrum to Idea in Gujarat / UP-West
Ahead of the release of the Government Policy on Telecom Spectrum Sharing, M&A, etc we’d like to highlight the War of Words between the TRAI and the DoT in this context since 2010. A gentle reminder would be that the interest of the Nation comes last and the agenda driven politics along with filling the coffers of Political masters offshore bank accounts drive these differences.
Telecom Spectrum Sharing in India
TRAI Recommendations in May 2010Spectrum sharing will be permitted but in each case, it will be in the same licence service area and will be with the prior permission of the licensor, strictly in accordance with the guidelines being laid out. Continue reading TRAI Vs DoT – War of Words on Spectrum Sharing in India
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.
Why Kumar Birla Pomoted Idea Will Bid Aggressively in Spectrum Auction ?
Idea Cellular is promoted by Aditya Birla Group. A.V.Birla’s Management DNA is very well percolated down to every group company including Idea Cellular, the one I have been tracking very closely. Aditya didn’t believe in Manipulating Policies like Dhirubhai Ambani or Mukesh Ambani [Reliance Group]. If Indian Government didn’t want to give Aditya licenses, he wasn’t deterred and established industries outside India. Like wise, Kumarmanglam Birla is unmoved by the untouchable treatment given to Idea Cellular by Corrupt Government / Bureaucrats and prefers to fight it in the marketplace by offering competitive services.
The erstwhile Corrupt Telecom Minister of India created hurdles in the way for Idea for approving Spice Telecom takeover / merger and more hurdles over the issue of overlapping licenses. Idea Cellular is engaged in a legal battle which will take its own course of time, but then it’d lose the business opportunity and hence the aggressive Bidding for 1800MHz Telecom Spectrum.
What is Idea Cellular’s 1800MHz Mobile Spectrum Strategy ?
Idea Cellular’s licenses were cancelled in only 7 circles [indicated in Red in Chart Below]. However, the Earnest Money that it has deposited is good enough for Idea to win 5 MHz of Spectrum in 7 circles and 2.5 Mhz of Spectrum in remaining circles.
The Following Chart Shows Idea’s PAN India Spectrum Allocation in 900MHz Band and 1800MHz Band Continue reading Idea Cellular inching towards PAN India 1800Mhz Spectrum; 900MHz Retention & Migration Strategy – Voice & 3G Focus
The Indian Government levied Additional Spectrum Fees for Wireless Carriers in India using 1800MHz band to provide GSM based mobile Services. Decision on 800MHz band used for CDMA Services will be taken separately.
The Scam scarred Government has tried to strike a fine balance with incumbent operators Airtel, Vodafone, Idea versus the new operators Tata DoCoMo, Uninor, potentially Videocon. They decided on the following recommendations,
- Spectrum upto 4.4MHz in 1800 band is exempt from any fees
- All spectrum holdings beyond 4.4 MHz (GSM), will attract a Continue reading Additional Fees on 1800MHz GSM Spectrum. What about 900MHz ? Case Stronger for Mobile Tariff Hike
One of the surprise bidders at this exuberant price of Spectrum is Videocon Telecommunications. Videocon on its website lists as a $5Bn conglomerate but if you see the market capitalization of its flagship Videocon Industries, it is mere $1Bn and add another $1Bn for its unlisted energy ventures, that’s it. Everybody in the market knows which Politicians of Maharashtra have backed this company for vested interests 😉
So the question remains, on whose behalf is Videocon bidding ? In my opinion it is none other than Reliance Industries Ltd headed by Mukesh Ambani. Reliance Infotel Broadband already has 4G / LTE Spectrum in 2300 MHz band for Data Services. However, 4G / LTE Data only service [VoLTE] is atleast 3 years away in India to be a mass market. Thus, Mukesh Ambani has no choice but to offer complete bouquet of Wireless Services including Voice. Another strong reason to believe that Mukesh Ambani is backing Videocon is due to the fact that it has shown fresh interest in 800MHz band which is likely to be used for Data Services complementing 2300MHz LTE Spectrum. Continue reading Is Mukesh Ambani Backing Videocon Telecom for Spectrum Auction Using our Bottom 16 Bid Strategy ?