Bharti Airtel and Vodafone-Essar are at the most advantageous position for the upcoming 3G spectrum auction in the most lucrative and competitive circles of Delhi and Mumbai.
As per the schedule announced by the department of telecommunications (DoT) on Friday, 3G auctions would be held on January 15.
The Delhi and Mumbai circles have emerged as the most competitive as these two metro circles would be able to notch up the maximum subscribers in the 3G services fold, which enables faster download of data and video streaming on mobile phones.
The two circles have also emerged as the toughest because of the paucity of 3G spectrum in the 2.1 Ghz band here. For instance, Delhi has only three blocks of 5 mhz spectrum, of which one is reserved and already allocated to the state-owned Mahanagar Telephone Nigam Ltd (MTNL). This leaves only two blocks for auction, meaning only two operators, apart from MTNL would be able to provide services here.
Mumbai is relatively better, with five blocks available. With one reserved and allocated to MTNL, auction would be for 4 slots.
Now let?s see how Bharti Airtel is at an advantageous position for the top slot in Delhi and Vodafone for the second. In Mumbai, Vodafone has the advantage for the top slot and Bharti for the second.
The auction guidelines state that in the event of a tie between two operators, the one with a higher subscriber base would be deemed winner. Bharti has the highest subscriber base in Delhi at around 4.4 million users at November-end. The number two operator is Vodafone Essar at about 3.7 million subscribers. Naturally this puts them at an advantage over others.
Coming to Mumbai, the highest subscriber base is of Vodafone at around 4.1 million followed by Bharti at 2.7 million.
Moving from the Delhi and Mumbai circles, the auction design favours the existing operators over the new ones thereby making the chances of new (read foreign players) the dimmest. This is because in the event of a tie between an existing operator and a new one, the existing would be allocated the spectrum.
Therefore, on a circle-wise basis, the most advantageous position are of the operators who have the highest subscriber in any respective circle, then come the existing operators and last the new operator.
Analysts maintain that with the dice being loaded against the new (foreign) players, operators like the Nordic telecom major, Telenor, which has decided to pick up to 60% stake in a new licensee Unitech Wireless, has decided to opt out of 3G auctions. The other major reason could be the high bid amount followed by an even higher network rollout cost.