New Delhi: Bharti Airtel Ltd and Reliance Jio Infocomm Ltd have emerged stronger from the spectrum auction that ended Thursday, analysts have said.
Bharti Airtel and Reliance Jio mainly focused on increasing their 4G network capacity and bought over 90% of the spectrum available in 2,300 megahertz (MHz) band, ensuring they retain their edge in this band. Idea Cellular Ltd and Vodafone India Ltd don’t have pan-India services in either 3G or 4G.
“Post-auctions, Bharti Airtel and Reliance Jio remain even better placed to gain share, given their lead in spectrum, network and fibre. (We) retain BUY on Bharti Airtel,” CLSA said in a note to investors on 7 October.
“This auction further reinforces spectrum leadership of Bharti and RJio in the high- speed data market. We believe, RJio has more balanced holding with the right blend of coverage and capacity spectrum,” Edelweiss Securities Ltd said in a 10 October note.
Bharti Airtel still remains the leader with a spectrum market share of 22%, which is unchanged, followed by Reliance Jio with 19%, up from 18%.
Vodafone and Idea have improved their spectrum market share to 15% from 13% and 11% from 10%, respectively.
Competition will intensify as Reliance Jio now faces at least two telcos in each telecom circle who have the 4G spectrum to match its data speeds. Reliance Jio claims to have signed up 16 million subscribers on its network in the first month of its launch.
“We find the smaller telcos most vulnerable and see faster consolidation in the space as they do not have enough data spectrum. Our vendor channel checks suggest that the top 3 should be in good position to deploy 4G in the next 3-6 months,” Bank of America Merrill Lynch (BofA-ML) said in a 10 October note.
Telecom minister Manoj Sinha said on Friday that the government will decide on a revision of the pricing of spectrum in the efficient, but expensive, 700 MHz band “at the right time.” Experts don’t see the need for more spectrum for another year or two.
Spectrum auction ended in five days with the government raising Rs65,789.12 crore in revenue—a fraction of the Rs5.63 trillion (at base price) of spectrum put up for sale.