Vodafone spectrum gain '+ive': Moody's

"The auction's outcome is credit positive for Telenor because it will add to its market share in India, which was just under 10 per cent at the end of September.

"The auction is also credit positive for Vodafone because the additional spectrum will help enhance its coverage in India, including rural areas, at a relatively low cost," according to the Moody's research note.

The report said Telenor's revenues from Indian market is likely to double in the next three years. At present India accounts for about 5 per cent of Telenor's revenues, which is likely to rise to to about 10 per cent by 2015, it said.

Moreover, "critical to the positive credit implications of the purchase is our expectation that the Indian business (of Telenor) will turn EBITDA break-even in 2013 or 2014 at the latest and will become a self-funding operation," the report added.

With a population of about 600 million in the awarded areas and mobile phone penetration of just 40 per cent, the spectrum presents a strong growth opportunity for Telenor, Moody's added.

India is the world's second-largest wireless market after China, and for Vodafone, the country is  one of the biggest markets with nearly 153 million subscribers.

Moody's, however, said the regulatory risk for both companies in India is substantial, saying the regulators have been "unpredictable and volatile" in the past.