Reliance Jio Infocomm set to drive bidding in Indian auction - Mobile World Live

Reliance Jio Infocomm set to drive bidding in Indian auction

04 FEB 2014
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Reliance Jio Infocomm’s ambition to rival market leaders Bharti Airtel and Vodafone could power the freshly-launched spectrum auction in India, after a first day when total bids hit $7 billion.

If Jio Infocomm bids aggressively it might end this week as a serious rival to the country’s two leading operators, according to Reuters.

The government reauction of 2G frequencies in the 900 MHz and 1.8 GHz bands offers a means for Jio Infocomm to build its stash of radio frequencies, particularly for voice services. Reliance is competing for both bands on offer.

The company is currently building a nationwide 4G network although it has yet to launch a service.

Meanwhile, the country’s largest operators – Bharti Airtel and Vodafone – are desperate to keep hold of their existing radio frequencies, particularly in the prime markets of Delhi and Mumbai.

Bharti and Vodafone will see their existing licences expire in November this year if they fail to triumph in the current auction.

After yesterday’s first day, the government had received total bids worth $7 billion (as opposed to the total winning bids which is a smaller figure and not disclosed before the end of the auction). The government expects a minimum return of $1.8 billion from the process which is expected to run for about one week.

There are eight bidders in the auction.

However, past auctions in India have overwhelmed as bidders held back, hence the importance of Jio Infocomm which has the potential to deliver bumper returns for the Indian government.

Nitin Padmanabhan, an analyst with Espirito Santo Securities, wrote in a note that where bidders paid deposits gave a clue as to their bidding intentions. His comments were reported by Bloomberg.

“Deposits by eight telcos participating in the auctions suggest to us that the top 2 players and Reliance Jio have kept all options open to be able to bid across circles,” he wrote.

“An analysis of average total minutes per circle per MHz of spectrum suggests to us that telcos are starved for spectrum in 4 circles and we think bidding in these circles is likely to be aggressive.”

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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...

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