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Updated: India’s 2014 2G Auction Results: What The Telecom Operators Are Saying

Our coverage of the 2G Auctions is brought to you by OnMobile Global, India’s leading Mobile Value Added Services [VAS] company

India’s 2G auctions of 2014 concluded yesterday after 11 days and 68 rounds of bidding. Several participating operators have issued statements reacting to this and stating their plans on how they intend to use the spectrum:

Reliance Jio Logo

Reliance Jio Infocomm: Reliance Jio Infocomm says it will be using the spectrum acquired in 1800MHz band along with its pan-India 2300MHz spectrum to address the expected increase in demand for digital services and improve its in-building coverage. 

What’s worth noting here is that Jio has mentioned digital services here as opposed to voice. Remember that Reliance Jio is looking to bundle several digital services like live TV, cloud-based file storage and synchronization service, music and video-on demand services among others along with its 4G service, whenever it launches in India.

While there is not much information on Reliance Jio’s 4G rollout plans as yet, an ET report cites a source to say Reliance Jio will be offering voice and 4G services to consumers through the 1800MHz band while enterprise customers will receive these services through the 2300 MHz band.

This is quite an interesting approach, since it solves a major pain point of a lack of 4G device ecosystem which supports the 2300MHz band, being used by Airtel and Reliance Jio for its 4G services. Consumers will be able to use 4G services on their existing phones while enterprises can spend on TD-LTE supported equipments to make use of 4G services. This will also enable Reliance Jio to go aggressive on its consumer-focused 4G service.

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Reliance Jio Infocomm has to pay a total Rs 11,054 crore for the spectrum acquired, of which 33% (around Rs 3,647 crore) is being paid initially and the remaining through ten annual installments after the two year moratorium.


– Bharti Airtel also seems to have similar plans: It plans to use the acquired spectrum to roll out high speed 4G networks using FD-LTE technology in the 1800 MHz band besides its existing TD-LTE roll-out in the 2300 MHz band, so as to secure a pan-India 4G footprint.

Note that Bharti Airtel is currently the only operator offering 4G services in India and had claimed to have 0.1 M 4G subscribers in the preceding quarter. This was despite a lack of TD-LTE supported 4G device ecosystem in India, due to which the company is currently offering 4G service through multi-mode USB dongles and Indoor Wireless gateways, although the company had stated plans to launch 4G LTE services for smartphones in December 2013.


The telco said most circles in the 1800MHz showed a balanced approach between the revenue for the exchequer and industry viability due to enough spectrum being put up for auctions while the 900 MHz band resulted in artificial and unrealistic prices due to spectrum shortage and undesirable position of incumbents who were forced to bid for this spectrum to protect their investments and interest of their customers.

Gopal Vittal, Joint MD & CEO – India, Bharti Airtel said future auctions should ensure that more spectrum should be secured in the 900 MHz band from other agencies and operators who are grossly underutilizing this important spectrum band. He also added that this auction highlights the urgent need to vacate E-GSM spectrum in the 800 MHz band which is currently being used for older technologies or lying unused with certain agencies.

Bharti Airtel has acquired 115MHz spectrum in the auction, for which it has to pay Rs 18,529.64 crore. The company will be making an upfront payment of Rs 5,425 crore initially, with the balance to be paid in ten annual installments of Rs 1,310 crore each, after the two year moratorium.

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– Vodafone India: Vodafone India says it has retained the existing 900 MHz spectrum in three most important circles – Mumbai, Delhi and Kolkata and has bought spectrum in the 1800MHz band in Mumbai, Delhi, Kolkata, Karnataka and Kerala to roll out 4G services. The company says these circles currently make up for 50% of Vodafone India’s data revenues.


The telco points out it is the only operator to provide both 2G and 3G services on 900MHz in Mumbai and Vodafone Mumbai is the only operator in India to have data capabilities on all the commercial spectrum bands: 3G on 900MHz and 2100MHz and 4G on 1800MHz

Vodafone is spending a total Rs 19,600 crore in this auction of which Rs 5,600 will be payable in this fiscal.

Marten Pieters, MD & CEO, Vodafone India however raised debt concerns, saying much of the auction spends will end up as debt on the balance sheets of the mobile operators, which will hurt the operators’ ability to invest in the roll out of new technologies and invariably result in higher prices and reduced service levels for consumers.

He also added that the industry is still spectrum starved compared with other countries and more spectrum should be made available in all bands on reasonable terms, if the government intends to meet their ambitious broadband objectives.

Idea Cellular: Idea Cellular plans to use the spectrum acquired to launch 4G services in eight of its key revenue markets (Kerala, Maharashtra & Goa, Andhra Pradesh, Karnataka, Madhya Pradesh & Chhattisgarh, Punjab, Haryana, and North East), which represents 64% of its revenues.

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It also now has the ability to extend its 3G services to the key Delhi circle. With this, Idea can now roll out 3G spectrum in 12 circles which covers almost 79% of its gross revenues.


Idea also pointed out it can now roll out all the three technologies – GSM, 3G and 4G in six markets (Kerala, Andhra Pradesh, Maharashtra & Goa, Madhya Pradesh & Chhattisgarh, Punjab, and Haryana) which represents 53% of its revenues.

That being said, it doesn’t look like Idea is looking to roll out 4G services in these circles anytime soon. Idea Cellular Managing Director Himanshu Kapania had told in an interview to The Economic Times that 4G is only a long term plan for them since they believe the ecosystem has to fully develop for 4G services.

Idea Cellular is spending a total Rs 10,400 crore at Rs. 160 crore per MHz in the auctions and the company plans to cover this in less than two years on EBITDA terms, based on the current EBITDA trends in the above mentioned nine markets. The company is paying Rs 3,100 crore initially and the balance amount will be paid in ten equal installments with a 10% interest after the first two year moratorium.

Uninor: After closing down operations in seven circles in 2012-2013, Telenor group which operates in India as Uninor seems to be slowly increasing its footprint: It has acquired spectrum in a new circle of Assam, where it has secured 6 MHz spectrum for Rs 216.6 crore. This is along with acquiring additional spectrum in four of its six existing circles in the 1800 MHz band – UP East, UP West, Bihar & Jharkhand and Andhra Pradesh.

Uninor Logo

The company will be shortly launch its services in Assam and claims the new circle will allow them to potentially serve to an additional 30 million population. With the inclusion of Assam, Uninor will be increasing its footprint to seven circles in India.

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Telenor believes that Assam fits well to the Uninor’s new model, wherein the telco focuses only on basic services (voice, SMS and basic Internet) and aims to offer the most aggressive plans in these services. This was after Telenor noticed that data wasn’t contributing to its revenue growth and this trend was likely to continue for a few years. (Also read3G Data Ecosystem Not Evolved In India, 2G Sufficient – Telenor CEO Jon Fredrik Baksaas)

Uninor also mentioned that additional spectrum acquired will allow them to improve its voice and data capacity by approximately 20% to 25% in four of its six operational circles.

In the remaining two circles (Gujarat & Maharashtra), Uninor will be improving capacity and coverage by significantly expanding its network sites. Earlier in the week, Telenor had stated plans to redeploy 5,000 sites for geographical expansion in existing six circles over the next five months and was planning to invest NOK 300 million (around Rs 304.8 crore) on this initiative.

We’ll update this post as and when we get more reactions from telecom operators

Also readIndia’s 2014 2G Auction Ends: Operator & Circle Results

Updates: The article has been modified for better clarity. Added more information on Reliance Jio and Idea Cellular’s 4G plans. Added Telenor’s plans.

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