Spectrum auction to witness heavy demand for 4G bands

KOLKATA: India’s largest spectrum auction is likely to see heavy demand for the 4G bands of 1800 MHz and 2300 MHz and those in the 2100 MHz (3G) band, with Vodafone India pegged to be the most aggressive bidder in the sale slated to start September 29, say industry executives and analysts.
Experts expect the Indian unit of UK’s Vodafone Group Plc to maximise spectrum purchases in the 1800 MHz band to have enough to launch 4G in all key markets. The country’s second-largest mobile carrier is also expected to plug 3G spectrum gaps in seven circles (see table) to have a pan-India 3G footprint in the 2100 MHz band.

“One can easily expect Vodafone to accumulate as much 1800 MHz spectrum as possible to launch 4G across India, which it has failed to do so far,” an auctions strategist at one of India’s leading mobile phone companies told ET. Vodafone currently has 4G airwaves in five circles where it has already launched services.


This senior executive also expects the telco to target cheaper capacity 4G spectrum in the 2500 MHz band as a fallback option if the price of 1800 MHz airwaves shoot up sharply beyond the base price, given the strong likely demand for this band.

An analyst at a leading foreign brokerage, in turn, expects Idea Cellular—with 4G airwaves and operations in 10 circles—to also selectively target spectrum in the 1800/2100 MHz bands to plug 4G and 3G gaps in its leadership circles.

Idea’s immediate priority, he said, would be grabbing 4G spectrum in the 1800 MHz band in key markets, UP-West and Gujarat—two circles where its spectrum trading deal with Videocon Telecom fell through. In case Idea fails to acquire these airwaves a second time, it could even target expensive 4G spectrum in the 700 MHz band “in just these two leadership circles to secure turf,” said the executive cited above.

The company is also likely to target 4G airwaves in the 1800 MHz band in UP-East and Bihar and similarly plug 3G gaps in the 2100 MHz band in Mumbai, Karnataka and Tamil Nadu to reinforce data spectrum holdings in its leadership markets.

Market leader Bharti Airtel, which has the strongest 4G footprint among incumbent carriers, is widely expected to target 3G airwaves in the 2100 MHz band to plug gaps in Kolkata, Kerala and Punjab. It is also likely to go for incremental capacity 4G spectrum purchases in the 2300 MHz band in five circles (see table) to have a pan-India coverage on this band, said another industry expert.

Experts and analysts are split on 4G newcomer Reliance Jio’s bidding strategy, with a section suggesting that the Mukesh Ambaniled telco’s top most priority would be plugging sizeable gaps in its 800 MHz spectrum footprint in order to be in a position to jointly access 10 MHz of such contiguous 4G spectrum in top markets (see table) with Reliance Communications by virtue of its airwaves sharing deal.

Others expect Jio to leverage the recent reduction in the block size of airwaves in the 2300 MHz band from 20 MHz to 10 MHz, to augment its countrywide spectrum holdings on this band.

In contrast, bidding by Anil Ambani-led RCom and Tata Teleservices is slated to be a low key affair. Both are likely to only focus on markets where their permits expire next year. Accordingly, RCom is slated to solely target 1800 MHz spectrum in Gujarat where its licence expires next September while the Tatas may bid for airwaves in the 800 MHz band in key circles like Mumbai, Maharashtra and Andhra Pradesh, where its permits expire next year.

Bharti Airtel, Vodafone India, Idea, Reliance Jio, RCom and Tata Tele did not reply to ET’s emails on their possible bidding strategies. The government will auction a total 2354.55 units of airwaves across the 3G bands of 900 MHz and 2100 MHz and the 4G bands of 700 MHz, 800 MHz, 1800 MHz, 2300 MHz and 2500 MHz.