New Delhi: Idea Cellular Ltd and Aircel Ltd applied on Friday to participate in India’s auction of third-generation (3G) high-speed mobile spectrum on the last day for submissions, joining companies such as Bharti Airtel Ltd and Reliance Communications Ltd (RCom) in the race for the limited number of licences that are available.
Others who submitted applications for 3G radio spectrum include the Dhoot family-promoted Datacom (Videocon Mobile).
Graphic: Paras Jain / Mint
RCom, Bharti and Idea have also filed their applications for the broadband wireless access (BWA) spectrum auction. BWA technologies enable high-speed data communication over wireless links and provide better coverage than fixed-line broadband systems.
Others who applied for BWA spectrum on Friday include Aircel, Spice, Agure and HCL Technologies Ltd, taking the total number of applicants to 11. Qualcomm, Tata Communications Ltd, Tikona Digital Networks Pvt. Ltd and Vodafone Essar Ltd applied on Thursday for the three slots of 20MHz across the country.
The auctions for 3G spectrum are scheduled to start on 9 April while those for BWA spectrum will begin two days after close of the 3G auction.
“One surprising element is the number of applicants for BWA spectrum. It looks like there is going to be an all-out fight for that spectrum at the auction,” a Mumbai-based analyst with a multinational brokerage firm said on condition of anonymity as he is not authorized to speak with the media. “It’s not surprising that none of the international telcos have applied. They were anyway complaining that the policy has been tailor-made for incumbent operators. Most of the new operators have applied as they have the backing of the international ones.”
Of the firms that have pan-India licences to operate telecom services in the country, Loop Telecom Ltd and Uninor hadn’t submitted their applications.
“It is interesting to see that some operators with services already operational in the country have not applied while others who have yet to start their operations have applied for 3G spectrum,” a senior department of telecommunications official said on condition of anonymity.
Graphic: Paras Jain / Mint
Uninor, a joint venture between Telenor ASA and Unitech Wireless Ltd, said it didn’t believe India was ready for 3G. “There will be other opportunities and routes to get into 3G at a stage when the market is really ready for it and the demand makes for a sound business case,” it said in a statement. “We cannot participate in these auctions when we haven’t even received the 2G spectrum that we have already paid for.”
Loop Mobile declined to comment.
Friday’s submissions take the total number of applicants for 3G spectrum to nine operators for four licences that will allow pan-India coverage. Five of the 22 operating areas, or telecom circles, have five slots of 3G spectrum up for auction.
The number of operators that have applied indicates that the price of the air waves will be higher than anticipated, another Mumbai-based analyst said.
“We estimate fair value for pan-India 3G spectrum at $7.5 billion (Rs35,000 crore, or $1.7 billion per operator) and $1.8 billion (Rs8,000 crore, or $600 million per operator) for BWA spectrum,” Rajiv Sharma, analyst with HSBC Securities and Capital Markets (India) Pvt. Ltd, wrote in a 19 March report. “Our conservative valuations are based on our view that 3G service penetration will be gradual, given the limited penetration of 3G-enabled handsets.”
At present only 30 million subscribers have 3G handsets, according to the HSBC report.