Given that telcos bid R65,789 crore, or just a 4% premium over the reserve price for various spectrum bands, it is difficult to believe there are any losers. Unlike in the past, telcos didn’t bid recklessly—in the 2015 auction, bids for the 900 MHz band were 1.95 times the reserve price and, in 2014, they were 1.85 times. Which is why, telcos used up just 41% of the earnest money points they had deposited at the beginning of the auction. Much of the reason for the sensible bidding, it is true, is because no telco licenses were expiring, and therefore needed to be won back at all costs—yet, with RJio taking the market by storm, telcos did need to beef up their networks in a hurry. What most did was to just plug the immediate gaps in their networks and wait for another occasion on which to accumulate spectrum. At the end of the auction, Vodafone plugged the gaps in its 4G coverage in eight more circles, taking the total up to 17; Idea plugged gaps in important circles like UP West and Gujarat and significantly added capacity in Madhya Pradesh, taking its 4G capacity to 20 circles—in UP East, picking up an additional 5 MHz carrier in the 2100 MHz band will allow it to offer 4G-like speeds on what is essentially a 3G band. Bharti Airtel chose to add an additional 4G capacity layer of 2300 MHz frequency in 13 circles and, like Idea, bought an additional 5 MHz in the 2100 MHz band in Delhi, Bihar, Rajasthan and J&K to offer 4G-like speeds.
Even so, there were several losers, starting with the country’s telecom subscribers who never got to experience the top-class surfing they could have got had the 700 MHz spectrum been sold, but wasn’t, thanks to Trai pricing it at twice its worth. Given how willfully this was done, the regulator also lost a lot of its sheen—that it helped telcos who had spectrum in the nearby 800 MHz frequency band only made the optics worse.
In the case of Tata Teleservices, it is not clear why it did not bid for more 800 MHz spectrum in several circles since this would have helped create a 5 MHz block that would be useful for 4G services—now that Rjio has created the ecosystem of phones in this band—and could have been sold to the likes of Vodafone and Idea; alternately, they could have bought Tata’s 800 MHz spectrum and picked up more to create a 5 MHz block. In Andhra Pradesh, Tata had 3.75 MHz of 800 MHz spectrum and could have picked up another 1.25 MHz; picking up another 2.5 MHz each in Mumbai and Maharashtra would also have created a 5 MHz block. RJio used this strategy in Punjab and UP East to create a solid 10 MHz carrier in the 800 MHz band.
The biggest loser, of course, is the government which found virtually no takers for its 2100 MHz spectrum. Last year, when telcos were desperate for 3G spectrum to offer data services, the government failed to get this spectrum from the defence ministry. Had it not been for RJio’s entry, it is possible telcos would still have snapped up the 3G spectrum this year, but with consumers now getting a taste of 4G, few telcos were interested in stocking up on the 2100 MHz frequency band; there was more action in the 4G bands like 1800 MHz which saw bids at 6.8% more than the reserve price and 2300 MHz where bids were 4.4% higher. Apart from the fact that the government will miss its budget target by around a fifth, an auction where 60% of the spectrum did not attract even one buyer and where the average bid was a mere 4% higher than the reserve price is really a failed one.