Bidding for airwaves in the 1800MHz band for the Uttar Pradesh East circle is anticipated to continue for a few more rounds, as all three current wireless providers compete for the circle’s liberalised spectrum, which may be used to boost 4G capacity.
According to a senior source who requested anonymity, the government received an extra Rs. 231 crore on the fourth day of the auction, for a total of roughly 1.5 trillion at the end of 23 rounds of bidding. The rise in profits was due to increased demand in the UP East circle.
The main rationale for the competing bids, which have been above the base price for the last two days, was higher demand than spectrum supply. On the third day of the auction, the bidding price in the UP East circle jumped by 16% from the previous day and was 25% more than the base price of Rs. 91 crore per MHz unit. It climbed much more on day four.
“Demand for spectrum in the UP-E service region of the 1800MHz band was for 15MHz vs 10.8MHz on offer,” Credit Suisse analysts wrote in a note, adding that activity in the auctions was driven solely by bidding in the UP-East service area. In all other licencing regions, spectrum was purchased at the basic price.
Morgan Stanley reports that Bharti Airtel holds 16MHz of airwaves in the 1800MHz band circle, while Vodafone Idea and Reliance Jio each have 10MHz.
Adding more airwaves in this band means greater capacity, which can increase phone and data connection in the circle with the most subscribers (101.5 million).
Experts pointed to the lack of deregulation spectrum in other bands in the UP East circle—900 MHz, 2100 MHz, 2300 MHz, and 2500 MHz—that could be used to boost network capacity in the circle, prompting carriers to be aggressive in their bidding strategies to secure whatever spectrum is made available in the 1800 MHz band.
A liberalised spectrum allows telecom providers to supply mobile services using any technology.
In terms of revenue market share, the circle is also significant. “The UP East service region provides for a pretty substantial percentage of gross revenues for individual operators as well, ranging from 6.5 percent for Vodafone Idea to 8.4 percent for Airtel and 7.6 percent for Jio,” Credit Suisse stated.
Reliance Jio, Vodafone Idea, and Bharti Airtel compete for 8 percent, 10.2 percent, and 7.8 percent of users in Uttar Pradesh-East, respectively, and the circle is in each player’s top five markets by subscribers.
According to them, the circle is also the fourth-largest revenue source for the sector, accounting for 6.6 percent of adjusted total sales.
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