India’s next auction of 4G-suitable spectrum is expected to net significantly less than a previous sale of similar spectrum, as high levels of debt reduce operator access to credit, The Economic Times (ET) reported.
Citing comments from an unnamed official at the Department of Telecommunications, the publication said the auction is expected to raise INR400 billion ($5.5 billion) said to be a lower rate than the amount gained in previous auctions.
The source explained the level of debt already being carried by the country’s operators means financial institutions are reluctant to lend to them. In addition, consolidation in the sector means there are fewer potential bidders, further depressing potential takings.
Rules and pricing for the auction are set to be defined in this month. Operators are expected to use the additional airwaves to enhance existing services.
Relatively low expectations for the auction follow months of squeezed margins for operators amid a fierce price war in the sector. During the country’s last auction of 4G-suitable frequencies, authorities made INR660 billion, which was also lower than expectations as the majority of lots remained unsold.Subscribe to our daily newsletter Back