Companies

Vodafone eyes other telcos’ assets

Thomas K. Thomas Barcelona | Updated on March 13, 2018 Published on February 26, 2014

Marten Pieters

vodafone

Spectrum auction has separated men from the boys, say Pieters

Vodafone is interested in acquiring assets of other telecom companies in India, including spectrum and fibre, to get pan- India footprint for data services.

Vodafone currently does not have 3G and 4G spectrum in all the 22 circles putting it as a disadvantage compared to other players such as Airtel and Reliance Jio.

Speaking on the side lines of the Mobile World Congress, Vodafone India CEO Marten Pieters said, “We need more spectrum. I don’t have 3G in all circles. We also need more spectrum for LTE (4G technology). Assets like fibre in metros is expensive so existing assets have a value.”

Pieters said the outcome of the recently concluded auction has made it clear that telecom companies with deep pockets will survive.

“There are only a few who can stay. This auction has set the boys apart from the men. We know EBIDTA of some of companies are negative that’s not good for them in the long term.”

While Vodafone along with Airtel, Reliance Jio and Idea Cellular had emerged strong winners in the recently concluded auction, other players such as Tata Teleservices, Reliance Communications and Aircel struggled to acquire much airwaves.

According to data released by the Department of Telecom, Tata Teleservices and Aircel have negative networth.

‘Main asset’

Without naming any specific company Pieters said, “The good news for all these companies is that now we know there is value of spectrum. Their main asset is spectrum. But the issue might be whether these players want to sell assets and not the company. Because the buyer may be interested in only one part of the assets and not the entire company.”

According to market rumours, Vodafone may be interested in buying Tata Teleservices’ GSM spectrum in the 1800 MHz band. But Pieters declined to comment on any specific deals.

He, however, said the policy clarity over mergers & acquisition and spectrum trading could speed up consolidation. “In every market where data is growing, everyone will look for at least 10 MHz. Now, we have companies sitting on assets. This is not good for the industry and for these companies,” he said

When asked if Vodafone had overpaid for spectrum in the auction, he said that the bidding was voluntary, “There is no such thing as overpaying in auction. Of course, we would have loved to get it cheaper. But prices can be manipulated by controlling the supply. We didn’t have much alternative that buying back.”

3G footprint

Going forward, Vodafone will focus more on getting pan India 3G footprint first before 4G. “LTE will not develop very fast. But by buying the spectrum we are prepared for the future journey.

“We are far more interested in getting 3G everywhere,” he said.

Published on February 26, 2014
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