Reliance Infotel, Sistema, RCom to keep off 2G spectrum auction

Our Bureau New Delhi | Updated on March 12, 2018

Other than winning spectrum, this auction has other implications for the incumbent players.

Videocon, Telenor join old players Airtel, Vodafone, Tata Tele, Idea to file application

Six operators, including Airtel, Vodafone, Tata Teleservices and Idea Cellular, have filed applications to participate in the spectrum auction set for November.

Among the new players only Videocon and Norway’s Telenor submitted applications.

Russia’s Sistema and the other companies like Etisalat, STel and Loop, whose licences are set to be cancelled in December, have decided to stay away from bidding. Reliance Communications is the only major incumbent player that has not submitted its application.

There were talks of Reliance Industries being interested in the auction, but the Mukesh Ambani-promoted firm has not submitted an application. However, market sources said that RIL could gain entry later by acquiring a stake in Videocon, if the latter succeeds in winning spectrum.

RIL’s gameplan

RIL had followed a similar strategy for the broadband spectrum auction in 2010 when it acquired controlling stake in Mahendra Nahata-backed Infotel Broadband. Videocon has applied for both 1800 Mhz (GSM) and 800 Mhz (CDMA) spectrum bands, which is a clear indication that the company has aggressive plans. Telenor has submitted application for GSM spectrum under a new wholly-owned entity — Telewings Communications Services Pvt Ltd. While the company has provided all documents and financial guarantees needed for participation, the Norwegian major said a final decision on whether or not to participate will be made before the auction starts. Russian major Sistema’s Indian venture has decided to stay away from the auction hoping it will get some relief from the Supreme Court. Sistema Shyam TeleServices Ltd has filed a Curative Petition seeking to restore its licences, cancelled by the Supreme Court in February. Market sources said that if the petition does not restore its licences, Sistema could look at buying an existing player. Though the company has denied this possibility, there have been reports of talks with Aircel.

Fight of the Incumbents

The auction will thus essentially be a fight among the incumbent players. Airtel may bid for GSM spectrum in three-four circles and Tata Teleservices is likely to bid for CDMA spectrum in three circles.

Other than winning spectrum, this auction has other implications for the incumbent players. The price determined through this auction will be used to calculate the one-time fee and the auction reserve price for 900 Mhz band post re-farming. Therefore, these players would like to keep the bid amounts as low as possible. The auction starts on November 12 with a minimum tag of Rs 14,000 crore for 5 Mhz of GSM spectrum. Auction for CDMA spectrum starts two days after the sale of GSM spectrum is completed.


Published on October 19, 2012

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