Telenor Group CEO Sigve Brekke already informed the telecom industry that the mobile operator will not be participating at the spectrum auction.
The development is not exciting for the newly appointed telecom minister Manoj Sinha and his team because the India government is targeting funds worth around $80 billion by selling airwaves during the spectrum auction in September 2016.
If Vodafone and Bharti Airtel are not keen to buy spectrum, telecom operators such as Idea Cellular, Reliance Communications and Reliance Jio Infocomm will not be making investments in a big way. Videocon has started switching off its network. MTS will soon be a part of Reliance Communications. Aircel spectrum will be acquired by Bharti Airtel. Tata Docomo is clueless about its future. Telenor is looking for a buyer and Vodafone can be the suitor.
Airtel purchased spectrum worth Rs 29,130 crore to become the second largest bidder during the spectrum auction in March 2015. Idea Cellular was the top player last year.
Telenor is in the process of identifying a buyer in India. The company has already struggled in India due to the 2G scam and lost its national presence in 2012. MTS also faced the same issue and does not want to invest and continue in India. MTS found a buyer in Reliance Communications, a telecom operator promoted by Anil Ambani.
“We have decided not to participate in the upcoming spectrum auction, as we believe the proposed spectrum prices do not give an acceptable level of return. We will continue our efforts to meet customer demands and grow the business based on the current spectrum holding. As we evaluate our options in India, we will be disciplined on Capex,” said Telenor Group CEO Sigve Brekke, during the latest earnings call.
Telecom industry experts feel that Vodafone and Idea Cellular need to buy spectrum to meet data demands of their customers. On top of this, both Reliance Jio Infocomm and Bharti Airtel will gain further in the rapidly growing 4G space. Without spectrum for mobile Internet, both Vodafone and Idea Cellular will feel the pressure.
“Spectrum auction is expected to take place in September-October. This is an opportunity to further enhance our network but as previously indicated we will continue to adopt a disciplined circle-by-circle approach,” said Vodafone Group CEO Vittorio Colao.
It seems that Vodafone is trying to be happy with its 3G coverage. The company said its 3G coverage in urban areas is now 96 percent. Vodafone’s 4G service is on track to reach over 60 percent of data revenue in nine circles by the end of the fiscal year with its existing spectrum.
Bharti Airtel, the telecom trend setter in the Indian mobile operator market, does not see much need for spectrum.
This is because Airtel, a SingTel group company, has already expanded its footprint across the country with its acquisition of more airwaves from Aircel and Videocon Telecom.
Airtel India CEO Gopal Vittal said: “When you look at our current spectrum holding, we are in a very solid position. We need spectrum to fill a few gaps here and there. Broadly, we don’t see a great need of spectrum at this point in time.”
The government plans to conduct the India’s largest-ever spectrum auction in September / October and sell airwaves worth Rs 5.66 lakh crore. In 2015, the government sold spectrum worth Rs 1.1 lakh crore.