The mobile operator said it was pleased with the outcome of the spectrum auction, which sees it hold on to its rights in the 900 MHz band in the major cities Mumbai, Delhi and Kolkata. It also bought 1,800 MHz frequencies in 11 circles - Mumbai, Delhi, Kolkata, Karnataka, Kerala, Gujarat, UP East, Rajasthan, Haryana, Andhra Pradesh and Punjab. The company will need to pay an initial INR 56 billion this fiscal year for the licences, with the remainder spread over the life of the licences.
The new licences secure the company's plans for developing data services in India, allowing it to provide 3G in the 900 and 1,800 MHz bands as well as prepare for 4G in the 1,800 MHz band. The company warned however that the high price of the spectrum will see debt in the mobile industry increase, limiting operators' ability to invest and leading to higher prices for end-users. While only a few blocks of spectrum were not sold the auction, operators still lack sufficient frequencies to fully develop the broadband market, according to Vodafone India CEO Marten Pieters.
The auction was India's latest attempt to secure market-driven prices for spectrum. Most of the operators' existing 2G licences were issued on a first-come, first-serve basis, until a Supreme Court ruling in early 2012 found evidence of corruption in the process and canceled dozens of licences. This left many operators unsure of the future of their business, either for lack of spectrum or no clarity on whether existing licences would be renewed on the same basis.
The government attempted to re-auction the 2G spectrum twice in 2012 and 2013, but struggled to find the right price and conditions to attract bidders. After numerous lawsuits and attempts from operators to renew their licences on the previous terms, as well a complete overhaul of the country's licence fee system, the latest auction finally secured the participation of the all major providers. Other bidders in the auction included Bharti Airtel, Reliance Communications, Aircel, Idea Cellular, Tata Teleservices, Reliance Jio Infocomm, and Telewings (Uninor). The Department of Communications has released details on the winning bids for each of the new licences on its website.
Uninor confirmed that it acquired spectrum in the 1,800 MHz in four its existing regions, UP East and West, Bihar and Andhra Pradesh, as well as the new circle of Assam, for a total cost of INR 8.45 billion. The operator said it will be able to raise its voice and data capacity by 20-25 percent as a result, while its bidding strategy means it can continue to offer affordable prices to the mass market and maintain a healthy business. In Gujarat and Maharashtra, where it did not win new spectrum, it will continue to invest in expanding network coverage and capacity. The addition of Assam means a new potential market of over 30 million customers.
