Incumbents survive, Reliance Jio Infocomm thrives in Indian auction

Incumbents survive, Reliance Jio Infocomm thrives in Indian auction

14 FEB 2014
Indian Flag

The winners and losers in India’s $10 billion spectrum auction are emerging, as Vodafone and Bharti Airtel hung onto prime markets in Delhi and Mumbai while newcomer Reliance Jio Infocomm broke through across the country.

Vodafone and Bharti Airtel are each paying approximately $3 billion in total for spectrum including the desirable 900 MHz frequencies in Delhi, Kolkata and Mumbai.

Rival Idea Cellular managed to snaffle 900 MHz frequencies in Delhi but the two big incumbents kept the frequencies to themselves in Kolkata and Mumbai. 900 MHz frequencies were only available in three markets.

Meanwhile newcomer Reliance Jio Infocomm won big in the sale of 1800 MHz by grabbing frequencies in 14 of the 22 locations on offer at a cost of $1.7 billion.

Jio Infocomm has scooped spectrum in Delhi, Kolkata and Mumbai, which raises the prospect of stiff competition for the incumbents in those markets.

The winner of 900 MHz frequencies in Delhi – Idea Cellular – also bought up 1800 MHz in eight locations. Its total spend was $1.7 billion, it said. The 1800 frequencies will be used for 4G.

Other winners included Aircel, Reliance Communications and Uninor. The latter won 1800 MHz frequencies in four of six locations where it already has a presence at a cost of $136 million. The additional spectrum will mean a boost of 20 per cent to 25 per cent in its voice and data capacity in UP East, UP West, Bihar & Jharkhand and Andhra Pradesh, it said.

In addition to 900 MHz in Delhi, Mumbai and Kolkata, Vodafone won 1800 MHz frequencies in 11 locations.

It said buying the latter spectrum in Mumbai, Delhi, Kolkata, Karnataka and Kerala will give a strong base for launching 4G. These markets account for more than 50 per cent of total data revenues and will drive the take-up of 4G, it said.

Under the auction terms, Vodafone said approximately one quarter of its £1.9 billion ($3.2 billion) bids must be paid in the current (2013-14) financial year. More generously, the remainder is paid off in instalments starting in 2017.

Author

Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

Read more

Related

Tags