The Department of Telecommunications (DoT) and telecom regulator TRAI are getting ready to auction spectrum in 900 and 1800 Mhz spectrum held by 29 licensees including Bharti Airtel, Idea Cellular, Vodafone, and Reliance Communications across 18 out of 22 service areas that are expiring in 2015-16.
Recently, DoT pproached TRAI seeking its recommendations on auction of spectrum in 900 and 1800 Mhz spectrum held by 29 licensees.
At a recent analyst meet, Reliance Communications said the Anil Ambani-promoted telecom operator would be the least impacted by the 2014-16 spectrum renewals. Please see the chart for more details.
According to Reliance Communications, the license renewal impact on Bharti Airtel will be 46 percent, Vodafone 71 percent, Idea Cellular 73 percent and Reliance Communications 15 percent.
In 2015, Bharti Airtel would need to renew spectrum license for Andhra Pradesh, Himachal Pradesh, North East and Punjab, while its Karnataka and Rajasthan circles will come up for renewal in 2016.
Vodafone needs to renew spectrum license for Kerala, Uttar Pradesh East, Rajasthan, Gujarat, Maharashtra, Tamil Nadu and Haryana telecom circles in 2015.
The internal note says Idea Cellular will need to renew telecom license for Gujarat, Haryana, Kerala, Madhya Pradesh, Maharashtra, Uttar Pradesh West, Himachal Pradesh in 2015 and Karnataka and Punjab in 2016.
On the other hand, Reliance Communications would need to buy spectrum through the auction for Assam, Bihar, Himachal Pradesh, Madhya Pradesh, North East, Orissa and West Bengal in 2015.
The Telecom Commission in its meeting on May 24-26, 2012 had accepted TRAI’s recommendation to conduct spectrum auction at least 18 months prior to expiry of licenses.
In the next fiscal year (2014-15), government expects revenue of Rs 38,954.02 crore from communication services, which include receipts from spectrum sale, license fees and one-time spectrum charges, according to the interim budget presented by Finance Minister P Chidambaram in February.
In December 2015, four licenses of Bharti Airtel, seven each of Idea Cellular and Reliance Telecom and six of Vodafone will complete their 20-year term and would require renewal.
While the companies can renew their licenses by paying a fixed fee, they will need to buy spectrum afresh through auction at market determined rate for continuing mobile and other wireless services.
By April 2016, two more permits of Bharti Airtel and Idea Cellular will come up for renewal, wire agencies reported.
The 29 licenses together hold about 198 megahertz of spectrum. Most of these licenses have spectrum in the premium 900 Mhz band for which telecoms have paid about two times more than the base price fixed by government in the recent auction.
They hold about 172 Mhz in 900 Mhz, and 26 Mhz in 1800 Mhz band.
Besides auction of 900 and 1800 Mhz band, government is working on auction of CDMA spectrum for which TRAI has already given its recommendations.
The government mobilized over Rs 61,162 crore through the spectrum auction held in February. Eight telecoms had bid for 900 Mhz and 1800 Mhz bands.
Bids worth Rs 23,590 crore were received for 900 Mhz spectrum in three service areas –Delhi, Mumbai and Kolkata. The 1800 Mhz band auction fetched bids worth Rs 37,572.60 crore.
