Operator debt tipped to limit India auction price - Mobile World Live

Operator debt tipped to limit India auction price

01 NOV 2018

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.

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Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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