Spectrum sales: High stakes battle rages in UP
While everyone knows that Uttar Pradesh is a key state in national politics, , the country’s most populous state has also emerged as the most hotly contested circle among telecom operators at the spectrum auctions.
While bidding for spectrum in other states got over by the second day, telecom operators are vying for the 1800 Mhz band in Uttar Pradesh (East) circle. The battle for spectrum in this band has been raging for two days, with a persistent aggregated demand — much higher than the total number of blocks offered for sale.
Here’s why: For Bharti Airtel, this circle accounts for 10.21 per cent of its total subscriber market share. Only Bihar has more subscribers on Airtel’s pan-India network. When it comes to revenue, UP (East) accounts for 7.67 per cent of Airtel’s overall income. Similarly, subscribers in this circle account for 8 per cent of Jio’s total user base and 7.19 per cent of its revenues. Vodafone Idea is also an equally strong player in this circle.
But when it comes to spectrum holding in the 1800 MHz band, Bharti has an edge with 15 MHz of spectrum, compared to just 10 Mhz each held by Reliance Jio and Vodafone Idea. So Both Vodafone Idea and Jio may want to acquire another 5Mhz in the ongoing auction. However, some part of Bharti Airtel’s spectrum in the 900 MHz band expires in 2024. Considering that there is no spectrum in 900 Mhz for sale in the current aucion, Airtel would want to acquire spectrum in the 1800 Mhz band to compensate.
“UP East has become a bone of contention in this auction. None will like to budge — as the stakes are high in order for all the three bidders to preserve their leverage in this crucial market. Hence, most likely all three players are bidding 5MHz each. I would not be surprised if the tussle continues for many more rounds. It will be interesting to watch who blinks first. But one can be sure that the price of UP East will continue to rise till someone backs out. Till then, the auction will continue inthis circle alone, as the battle is settled in all the other circles and all the bidders are locked out,” Parag Kar, an industry expert wrote in a post.
July 29, 2022