Home / Companies / News /  5G sale spills over to Day 5 as UP East bids escalate

NEW DELHI : Bidding for airwaves in the 1800MHz band for the Uttar Pradesh East circle is likely to continue for a few more rounds as all three existing wireless operators are vying for the liberalized spectrum in the circle they can use for enhancing 4G capacities.

The fourth day of the auction netted the government an additional 231 crore for a total of nearly 1.5 trillion at the close of 23 rounds of bidding, a senior official said, requesting anonymity. Demand in the UP East circle was responsible for the increase in proceeds.

Higher demand than spectrum supply was the key reason behind the competing bids, which have been above the base price for the past two days. The bidding price in the UP East circle increased 16% on the third day of the auction from the previous day and was 25% above the base price of 91 crore per MHz unit. On day four, it increased further.

“The demand for spectrum in the UP-E service area of the 1800MHz band was for 15MHz compared with 10.8MHz on offer," analysts at Credit Suisse said in a note, stating that activity in the auctions was being driven only by bidding in the UP-East service area. In contrast, spectrum was bought at the base price in all other licence areas.

According to Morgan Stanley, Bharti Airtel has 16MHz of airwaves in the 1800MHz band circle, while Vodafone Idea and Reliance Jio have 10MHz each.

Adding additional airwaves in this band means more capacity, which can improve voice and data connectivity in the circle that has the largest subscriber base in the country at 101.5 million.

Experts pointed to the absence of liberalized spectrum in other bands—900 MHz, 2100MHz, 2300MHz and 2500MHz—in the UP East circle, which can be used to boost network capacity in the circle, making the carriers aggressive in their bidding strategies to secure whatever spectrum is being made available in the 1800MHz band.

A liberalized spectrum allows telecom operators to use any technology to deliver mobile services.

Reliance Jio, Vodafone Idea and Bharti Airtel have competing market shares of 8%, 10.2% and 7.8% by subscribers in Uttar Pradesh-East, and the circle is among the top five markets by subscribers for each player.

The circle is also important in terms of revenue market share. “For individual operators as well, the UP East service area accounts for a reasonably large share of their gross revenues—ranging from 6.5% for Vodafone Idea to 8.4% for Airtel and 7.6% for Jio," Credit Suisse added.

The circle is also the fourth-largest revenue generator for the industry, accounting for 6.6% of the telecom industry’s adjusted gross revenues, they noted.

ABOUT THE AUTHOR

Gulveen Aulakh

Gulveen Aulakh is Senior Assistant Editor at Mint, serving dual roles covering the disinvestment landscape out of New Delhi, and the telecom & IT sectors as part of the corporate bureau. She had been tracking several government ministries for the last ten years in her previous stint at The Economic Times. An IIM Calcutta alumnus, Gulveen is fluent in French, a keen learner of new languages and avid foodie.
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