The A-TEAM

IMT, GHAZIABAD
FINANCE, INDIA
SPECTRUM AUCTION

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The case talks about how all the companies bid for the spectrum auction that
took place in March, 2015. All the companies had an eye for renewing their
existing spectrum and with that focus they all bid heavily for spectrum renewal
in the 900 MHz frequency band. Major players like Idea, Vodafone, and Airtel
managed to regain their existing licenses.

Getting hold of these spectrum band was imperative for telecom

operators due to already setup infrastructure for same band, thus
reducing their maintenance cost. Moreover, these spectrum accounted for
major revenue generation for all the companies. 900 MHz band majorly
supports 3G data services and this band has been replacing 2100 MHz
band for 3G services due to its better efficiency and more coverage area
than 2100 MHz frequency band.
Airtel is keen on gaining pan India presence for providing data services
and in view of that it made acquisitions in the 2100 MHz band expanding
its operations from 19 cities to 21 cities across India. In the similar
manner, Vodafone owned 5 MHz each on 2100 MHz in 15 circles for quality
3G delivery.
1800 MHz frequency band is useful for 4G services and with the roll out of
4G services across India, it provides opportunities for all the major
telecom players to expand their customer base across regions. Reliance
Jio and Airtel had extensively bid for this frequency band in the previous
auction of Feb, 2014 and thus the reserve price for this frequency band
has seen a considerable jump. But, still acquiring space in this spectrum
band was essential for all telecom operators who had negligible presence
in this spectrum and this is visible from the total spent of Idea in this
frequency band.
800 MHz is also seen as a good substitute for 900 MHz band and keeping
this in view Reliance Jio has acquired airwaves in this frequency band. One
major reason to shift to this band can also be due to difference in reserve
price of 800 MHz frequency band as compared to 900 MHz frequency
band. 800 MHz band is said to support longer distance coverage and
better penetration through buildings and thus is considered more efficient
in areas such as Andhra Pradesh, Madhya Pradesh, and Bihar.
Reliance Jio also intends to collaborate with Reliance Communication in
spectrum sharing and that is the reason it didnt bid a lot in 900 MHz. The
collaboration is a win-win situation for both companies as it will help

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Reliance Communication lease out its under-utilized spectrum space and
on the other side it will help Reliance Jio to initially implement its telecom
operations.
This spectrum sale is also likely to trigger some tariffs hike due to huge
investments but seeing the total number of mobile connections in India,
tariffs might not end up being the driving factor and providing better
customer experience and service quality might end up being the
differentiator.