Recap 2015: Spectrum Auctions, an order of nine

The hugely successful auctions in March 2015 brought the bullishness back to the telecom sector, even though it predictably implied a rise in telcos’ debt levels.

For the first time after 2010, the telecom industry seemed to have put conservativeness aside as it participated in the spectrum auctions of March 2015. The auctions concluded after 115 rounds of fierce biddings that lasted 19 days and resulted in a contribution of Rs 109,874 towards the government exchequer. Blocks across all frequency bands, excepting 2300 MHz and 2600 MHz, were put up for bids.

Across the four frequency bands of 800 MHz, 900 MHz, 1800 MHz and 2100 MHz for which the auctions were held, a total of 418.05 MHz of spectrum was sold, even though 11 percent of the blocks offered remained unsold. Leading incumbent Airtel acquired a total of 111.6 MHz spectrum for a consideration of Rs 29,130 crore, with maximum focus on the 900 MHz bands, followed by 2100 MHz and 1800 MHz. A similar pattern was seen in the case of Vodafone too. Airtel, Vodafone and Idea Cellular together accounted for most of the spectrum spend, garnering a major share of the 900 MHz band.

Players like Reliance Jio and Reliance Communication, on the other hand, focused relatively more on acquiring capacities in the 800 MHz and 1800 MHz bands.

The auctions presented an opportunity for incumbents to protect their existing assets in the 900 MHz band, and excepting RCom, all ensured that they ended up holding on to their existing capacities and in case of Airtel and Vodafone, bolster it as well, though at a high cost.

Also Read: Movers & Shakers of Telecom in 2015