The A-TEAM

IMT, GHAZIABAD
FINANCE, INDIA SPECTRUM
AUCTION

airtel iCreate- Executive Summary 2015

The case talks about how all the companies bid for the spectrum auction that took place in March,
2015. All the companies had an eye for renewing their existing spectrum and with that focus they all
bid heavily for spectrum renewal in the 900 MHz frequency band. Major players like Idea, Vodafone,
and Airtel managed to regain their existing licenses.

Getting hold of these spectrum band was imperative for telecom operators due to already
setup infrastructure for same band, thus reducing their maintenance cost. Moreover, these
spectrum accounted for major revenue generation for all the companies. 900 MHz band
majorly supports 3G data services and this band has been replacing 2100 MHz band for 3G
services due to its better efficiency and more coverage area than 2100 MHz frequency band.
Airtel is keen on gaining pan India presence for providing data services and in view of that it
made acquisitions in the 2100 MHz band expanding its operations from 19 cities to 21 cities
across India. In the similar manner, Vodafone owned 5 MHz each on 2100 MHz in 15 circles
for quality 3G delivery.
1800 MHz frequency band is useful for 4G services and with the roll out of 4G services
across India, it provides opportunities for all the major telecom players to expand their
customer base across regions. Reliance Jio and Airtel had extensively bid for this frequency
band in the previous auction of Feb, 2014 and thus the reserve price for this frequency band
has seen a considerable jump. But, still acquiring space in this spectrum band was essential
for all telecom operators who had negligible presence in this spectrum and this is visible
from the total spent of Idea in this frequency band.
800 MHz is also seen as a good substitute for 900 MHz band and keeping this in view
Reliance Jio has acquired airwaves in this frequency band. One major reason to shift to this
band can also be due to difference in reserve price of 800 MHz frequency band as compared
to 900 MHz frequency band. 800 MHz band is said to support longer distance coverage and
better penetration through buildings and thus is considered more efficient in areas such as
Andhra Pradesh, Madhya Pradesh, and Bihar.
Reliance Jio also intends to collaborate with Reliance Communication in spectrum sharing
and that is the reason it didnt bid a lot in 900 MHz. The collaboration is a win-win situation
for both companies as it will help Reliance Communication lease out its under-utilized
spectrum space and on the other side it will help Reliance Jio to initially implement its
telecom operations.
This spectrum sale is also likely to trigger some tariffs hike due to huge investments but
seeing the total number of mobile connections in India, tariffs might not end up being the
driving factor and providing better customer experience and service quality might end up
being the differentiator.