The 2015 Spectrum auction for airwaves will be a competition among six financially sound telecoms, DoT’s pre-qualified bidder list points out.
See live coverage of Mobile World Congress 2015
These 6 financially rich telecoms include: Vodafone, Bharti Airtel, Idea Cellular, Uninor, Reliance Jio Infocomm and Reliance Communications.
The net worth of Vodafone India is Rs 8,258 crore, Bharti Airtel Rs 73,069 crore, Idea Cellular Rs 19,185 crore, Uninor Rs 1,052 crore, Reliance Communications Rs 17,022 crore and Reliance Jio Infocomm Rs 23,029 crore, according to DoT.
Aircel has negative net worth of Rs 6,668 crore, while the negative net worth of Tata Docomo is Rs 8,985 crore. Hence, both Aircel and Tata Docomo cannot bid for fresh spectrum. They can only bid for expanding in their existing telecom circles. The government is planning to sell spectrum in the 2100 MHz, 1800 MHz, 900 MHz and 800 MHz bands.
On top of this, Tata Docomo cannot bid for three telecom circles such as Jammu & Kashmir, Assam and North East.
The EMD paid by Indian telecoms also shows the money power of these companies. The EMD by Mukesh Ambani-run Reliance Jio was Rs 4,500 crore, Sunil Mittal’s Bharti Airtel Rs 4,336 crore, Kumar Birla-run Idea Cellular Rs 4,000, Vodafone India Rs 3,700 crore, Tatas-promoted TTSL Rs 1,500 crore, Anil Ambani’s Reliance Communications Rs 1,175 crore, Telenor-owned Uninor Rs 725 crore and Aircel Rs 500 crore.
DoT does not ban financially week telecoms from operating in India. But it wants financially strong firms to participate in the spectrum auction for bidding for new airwaves.
DoT does not even bother to check the background of Reliance Jio Infocomm, which has bagged the BWA (broadband wireless access) spectrum in 2010 and did not launch the service in the last five years due to uncertain technology conditions.
Money makes the difference and not background
DoT did not block the Mukesh Ambani-promoted telecom venture because Reliance Jio Infocomm is following the guidelines of the telecom ministry. They need to launch broadband services and achieve stipulated targets only in the middle of the year. DoT is not ready to answer for the lost biz potential of the spectrum owned by Reliance Jio, Airtel and Aircel.
Chip vendor Qualcomm, which bought some BWA spectrum, was allowed to sell the business to Bharti Airtel. Reliance Jio Infocomm was allowed to buy out a successful bidder, a HFCL-owned company, just after the auction. Both cases were in line with the telecom regulatory guidelines. Industry is trying to forget that the focus of the 2010 spectrum auction was to focus on WiMax technology.
In addition to Reliance Jio Infocomm, companies such as Bharti Airtel and Aircel have also bought BWA spectrum. They have not got enough subscribers and enough coverage due to the obvious reasons. There is no strong business case at present. The recent Nokia Networks MBit study says India has around 85,000 4G LTE connections.
The 2014 spectrum auction was a major disaster for Indian telecoms because they are yet to utilize the spectrum in a big way. Idea Cellular says it will consider LTE launch in 2016 – after studying the market. But spectrum is becoming golden goose for the telecom ministry – for both BJP and Congress led governments.
The year 2015 will not be different. If the U.S. wireless players are spending $40+ billion, why cannot Ambanis and Mittals spend a fraction of this? Mobile users continue to hunt for best quality service because Indian telecoms spend significantly less on telecom infrastructure.
Baburajan K
editor@telecomlead.com
