Spectrum auction: Reliance Jio's entry heats up competition, MTS stays out

Reliance Jio's entry in the spectrum auctions has heated up competition in the forthcoming spectrum auctions.

By Kul Bhushan Published Date
17 - Feb - 2015
| Last Updated
17 - Feb - 2015
Spectrum auction: Reliance Jio's entry heats up competition, MTS...

Despite so much of hue and cry over base price and spectrum availability, the next round of spectrum auctions are unlikely to be a dull affair. With Reliance Jio announcing its participation in the auction, competition has gotten tougher for the likes of Bharti Airtel, Vodafone India, Idea Cellular and Reliance Communications, which are up for their licence renewals.

Tata Teleservices, Aircel and Uninor have also confirmed to participate in the auction. So far, eight telcos will be in fray for the spectrum auction. However, CDMA-exclusive operator SSTL
has declined to join the auctions.

“Sistema Shyam TeleServices Ltd (SSTL) has consistently maintained that the pricing of 800 Mhz spectrum at Rs 3646 crores per MHz, is way out of line and does not merit a strong business case for buying additional spectrum. The Company continues to maintain that such pricing does not take into account the realities of the prevailing ecosystem within the 800 Mhz band,” says the company in a statement.

“It may also be noted that SSTL has approached the TDSAT (Telecom Disputes Settlement and Appellate Board) seeking direction against the DoT (Department of Telecommunications) for reassignment/rearrangement of the blocks/frequencies of liberalized spectrum allotted to SSTL during the auction held in March, 2013 in 8 circles for its CDMA services. SSTL has contended that the terms and conditions of the auction during March, 2013 permitted rearrangement of frequencies of liberalized spectrum with the other operators without any additional charge. However, since SSTL was the sole bidder during the said auction and there is no other successful operator for rearrangement of frequencies, it is incumbent upon DoT to rearrange/reassign the frequency to make the spectrum allotted to SSTL contiguous,” it adds.

According to reports, Reliance Jio is set to participate in the auction for 800, 900, 1800 and 2100 MHz. The operator, which has pan-India 4G licence, will be specially focussing on 800 MHz and 1800 MHZ bands, which can also be used for LTE networks.

Despite earlier apprehensions, the next round of spectrum auctions are likely to generate a lot of money for the government. According to an estimate, companies will be putting up about 90,000 crore in this auction.

"With nearly half of Rs 1,200-billion (Rs 1.2-lakh-crore) annual revenues at stake for large operators, the importance of the forthcoming spectrum auction can't be overstated. Telecom operators will shell out more than Rs 900 billion (Rs 90,000 crore) to bag airwaves in the upcoming telecom auction," according to a CRISIL estimate.

Also read: COAI warns of increase in mobile tariffs due to higher spectrum price

Source Indian Express, Business Standard