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India’s 2014 2G auctions ended yesterday after just 11 days and 68 rounds of bidding. Through these auctions, the Indian government was able to raise Rs 61,162.22 crores from the sale of 353.2 MHz of spectrum, with the two circles of Delhi and Mumbai accounting for 57% of the total money raised.
You can read what the participating telecom operators are saying about the 2014 2G auction results here. Other reactions on the 2G auction results:
– Reliance Jio’s Strategy & Increased 4G competition: Reliance Jio bid for spectrum in the 900MHz band and raised costs for existing operators like Bharti Airtel and Vodafone even though it didn’t have any known plans to offer services in that band, says Livemint citing unnamed government officials.
– Tata Teleservices Skips 2G Auction: Tata Teleservices was the only telco among the qualified bidders who didn’t pick up spectrum either in the 1800MHz band or the 900MHz band. Speculation doing the rounds of Tatas looking to exit the telecom industry altogether and in talks to sell Tata Communications and Tata Teleservices to Vodafone. Read more on Total Telecom. (Also read: Tata Teleservices Reportedly Surrenders 20MHz CDMA Spectrum).
– Vodafone India’s 4G plans & Increasing Tariffs: Marten Pieters, Managing Director and CEO of Vodafone India had told in an interview to Business Standard that it’s too early to commit to a timeframe for 4G launch in India. He added only one handset is currently 4G compatible in India and 2300MHz spectrum is not very efficient for 4G as it requires much higher number of sites than 1800MHz. “There is a lot to be done to get affordable low-cost 4G handsets into the country”.
He also added they will have to increase their tariffs every year depending on the cost levels, after witnessing declining tariffs for 18 years.
– Former Bharti Airtel CEO Sanjay Kapoor also says the tariff hike for consumers is inevitable. Operators will have to maintain a balance between a taking a hit on their margins and passing on the cost to the subscriber.
– 1800MHz more efficient than 2300MHz band for 4G: Deploying 4G services on 1800MHz band requires 30% less towers as compared to 2300MHz band, says Business Standard citing an unnamed executive of a telecom operator who is looking to offer 4G services on 1800MHz band.
– On Unsold Spectrum: Telecom Secretary MF Farooqui said they are taking a a call on the unsold spectrum separately, but it won’t happen immediately. Around 78MHz spectrum remained unsold in the 1800MHz band after the auction while the 900MHz band was sold out. Read more at The Hindu Business Line.
– Debt Concerns: The 2G auction payments will add to a combined debt burden of more than $33 billion in the telecom sector, even when its spread out over 10 annual investments. Bharti Airtel has more than $9 billion debt while Vodafone India has a net debt of $4.7 billion. Read more at Reuters.
– Consolidation In Telecom Sector May Be Delayed: The much needed consolidation in the telecom sector will take more time to happen, as companies won’t have enough funds left to consider potential acquisitions. Operators will also find it tough to make the requisite investments for rolling out networks in the rural market. Read more at The Economic Times.
– Government’s earnings from 2G Auctions: The government will be getting a minimum of Rs 18,296 crore in FY14, 61.9% higher than the initial target of Rs 11,300 crore. However, it will still be short of Rs 40,847 crore budgeted from other telecom services like one-time spectrum charges, receipts from 800 MHz spectrum and annual license fees. Read more at The Economic Times.
– Revenue Lower than CAG Revenue Loss Estimates: The spectrum retrieved from telecom operators whose licenses were revoked by the Supreme Court in 2012, has fallen short of CAG’s estimated notional revenue loss of Rs 176,000 crore. The retrieved spectrum has generated around Rs 47,000 crore so far, including Rs 37,573 crore generated in the auctions that concluded yesterday. CBI had estimated a much smaller loss at Rs 33,000 crore, while Telecom Minister Kapil Sibal had put forward a “Zero loss” theory. Read more at The Economic Times.
Our coverage of the 2G Auction Results: