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  1. Telecos to focus on monetising past investments

Telecos to focus on monetising past investments

Spectrum auction 2016 ended with an aggregate bid value of R658 bn, broadly in line with our pre-auction point estimate of R700 billion.

By: | New Delhi | Published: October 11, 2016 6:07 AM

Spectrum auction 2016 ended with an aggregate bid value of Rs 658 bn, broadly in line with our pre-auction point estimate of Rs 700 billion. No auction ends without throwing a surprise or two; the key one in this round was Idea and Vodafone bidding for 2500 MHz spectrum (as a capacity layer spectrum). We hope this is the last mega spectrum auction in the industry for a while and the focus shifts to monetising the massive data spectrum investments made in the past few years.

Bharti’s aggregate spend of Rs 142 billion was towards the higher end of our forecast range of Rs 60-170 billion. The company now has pan-India spectrum bank of a tad over 700 MHz , ahead of Jio’s 558 MHz. R-Jio’s total bids aggregate to Rs 136.7 billion.

Idea spent close to Rs 128 billion, acquiring spectrum in 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands. The company claims that it now has mobile broadband (3G or 4G) footprint across all 22 circles with 3G capability in 15 circles and 4G capability in 20. We are a bit surprised by the company’s bids in the 2500 MHz band, especially given the lack of a mature device ecosystem; we will have to wait and watch how things evolve here.

According to media releases Vodafone has spent around R200 billion, TTSL close to R45 billion, Aircel close to R11 billion and RCOM just about R0.7 billion. We understand that Vodafone has also invested heavily in the 2500 MHz band.

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