Telecom network operator Idea Cellular announced its deal to purchase spectrum of Videocon Telecommunications in Gujarat and Uttar Pradesh (West) circles for Rs 3,310 crore.
The Aditya Birla group promoted Idea Cellular aims to use the acquired spectrum for launching 4G LTE mobile broadband services in Gujarat and UP (West).
The deal indicates that there are no takers for Videocon Telecom as a company and its subscriber base which is expected to reach 10 million during the current fiscal. Videocon Telecom is targeting Rs 3,000 crore revenue during the current financial year. Videocon’s discussion with America Movil did not take off due to higher valuation, says industry sources.
With this spectrum trading arrangement, Idea Cellular’s 4G LTE spectrum footprint will expand to 12 service areas covering over 75 percent of Idea’s current revenue and over 72 percent of existing 170 million subscribers on VLR. These 12 circles currently contribute 60 percent of the Indian telecom industry mobility revenues.
Idea and 4G dreams
Idea Cellular earlier said it aims to launch 4G LTE services in 750 towns across existing 10 4G circles during the first half of 2016 taking on Bharti Airtel, Vodafone and Reliance Jio Infocomm, the 4G venture of RIL promoter Mukesh Ambani.
It plans to introduce 4G services in Gujarat and Uttar Pradesh (West) telecom service areas in 2016.
The Rs 3,310 crore investment for 4G spectrum in two telecom circles indicates that Idea Cellular is serious about its 4G future. On the other hand, Vodafone India CEO earlier said its 4G will be limited to select pockets in 5 telecom circles in India. Bharti Airtel, which had the first mover advantage, covered 330 towns with its high speed 4G services. Reliance Jio Infocomm is investing $15 billion in 4G networks.
Scope of the spectrum deal
As per the spectrum trading deal, Idea Cellular will be buying the rights for 2×5 MHz contiguous blocks of 1800 MHz spectrum in each service area until December 2032.
Idea Cellular will have mobility services across 2G (GSM), 3G (HSPA) and 4G (LTE) technologies in all of its 8 markets of Maharashtra & Goa, Kerala, Andhra Pradesh & Telengana, Madhya Pradesh & Chhattisgarh, Haryana, Punjab, Gujarat and Uttar Pradesh (West).
Idea will be the first and only operator with liberalized 5MHz contiguous spectrum to launch 4G LTE services in the service area of Haryana, and post completion of this transaction, in Uttar Pradesh (West).
Smartphones boost 4G
Smartphones are creating demand for 4G services. The 4G enabled devices achieved a three-fold increase in unit shipments in Q3 2015. Samsung emerged as the biggest 4G player in India – overtaking Lenovo — with its sub $150 LTE models such as Galaxy Grand Prime and Galaxy J2.
Kiran Kumar, research manager at IDC India, said 4G enabled devices are expected to be at the forefront in 2016, with the entire ecosystem preparing for this shift in the near future.
Consumers are ready for 4G. Will Indian telecoms roll out robust 4G networks to ensure better quality data services?
Baburajan K
editor@telecomlead.com
