Telecom spectrum more an issue in metros: Study

Telecom spectrum more an issue in metros: Study


Mumbai:Non-availability of spectrum, though a problem in metros, may not be an issue in smaller cities that are high-growth areas for telecom, a Morgan Stanley study has said.

“We believe spectrum is a bottleneck for operators, however, it is more of an issue in the metros, and less so in high growth areas such as Class B and Class C circles where we believe most of the incremental growth would come from," the study said.

The estimated average penetration in the metros is 66% as compared to 17.8% for India, 21% for Class A, 15% for Class B and 9% for Class C circles.

According to the study, the subscriber base in metros may go down. “Metros contributed 31% of the subscriber base in FY-04, but this has gone down to 18% in August 2007." it said.

“We estimate it to reduce to 14% in FY-10. We estimate that during FY 2008-10, Class C would account for 17%, whereas Class B would account for 46% and Class A 30%," it said.

“Metros would account for only 9% of the incremental net adds in our estimate," the study said. Existing operators can “easily double" their subscriber base without needing additional spectrum, Morgan Stanley said quoting TRAI’s recommendations.