New Delhi: Contradictory to popular opinion, the final policy for the upcoming auction for 3G and BWA spectrum has a number of foreign operators participating. But their presence is just not as obvious as one would have expected.
The 3G policy had come under much criticism as it did not make it easy for some of the world’s largest telcos without an existing presence in India’s telecom market to come in with the auction. India, being the fastest growing and second largest telecom market in the world, and not even half full, had many firms across the world clamoring to (the Indian Government) give them a backdoor entry.
Graphic: Ahmed Raza Khan / Mint
And when the 3G policy was announced, many of these firms, looking for space to expand, believed this was their chance. Some took the chance and may even pull it off. The details of ownership, of the applicants for the upcoming auction, published by the department of telecommunications on its website, on Tuesday, says it all.
From the world’s second largest operator by subscribers, Vodafone, that holds 71% in the second most profitable operator in India to the world’s most technologically advanced operator NTT Docomo that holds more than 26% in Tata Teleservices. Almost every applicant has a major chunk of its equity owned by a major foreign telco. Etisalat, Batelco, Maxis, Singtel, they are all there.
What is even more interesting is that Reliance Communications is one of two operators that does not have any foreign ownership – at least directly in the firms that are bidding for the spectrum. Another interesting aspect of the auction is that there are eleven operators bidding for two slots of BWA spectrum while there are nine bidding for the three to four slots of 3G spectrum. All because there is four times the spectrum to be won for half the price. The government will auction 20Mhz of BWA spectrum at a reserve price that is half that of the Rs3,500 for 5Mhz of 3G spectrum.
The auction has taken more than two years to reach this stage and its going to be an interesting one to watch as the 99th day of the year approaches (April 9 is the auction date).
Click here to read a post on foreign participation in the 3G auctions