Minimal competition likely for spectrum

New Delhi: Spectrum auction in India has turned into a buyer's market, and may see 'minimal competition' with operators going after airwaves that yield best value for money instead of focusing on renewing all expiring spectrum, BNP Paribas said on Thursday.

With countdown now on for spectrum auctions - where bidding is slated to begin on March 1 - ICICI Securities said it expects the final prices across spectrums to be equal to the reserve prices due to significant supply of radiowaves, and likely limited demand for expiring spectrums. While Credit Suisse expected 'limited participation', BNP Paribas was of the view that spectrum auction in India has turned into a buyer's market and may see 'minimal competition' with operators picking up spectrum that provides best value for money instead of focusing on renewing all their expiring spectrum. The price of 700 MHz spectrum remains expensive and is unlikely to receive much response in the coming auctions, concurred most industry analysts. Operators are likely to skip 700 MHz band again, BNP Paribas said in its report. "700MHz band prices remain significantly high to find any bidders," ICICI Securities said. It expects Bharti Airtel and Vodafone Idea Ltd (VIL) to renew their expiring spectrum only partially due to excess spectrum holding. Bharti, it observed, has 57 MHz in 1800 MHz band and 6.2 MHz in 900 MHz band coming up for renewal in 2021, but has amassed huge spectrum via merger and acquisitions, which should significantly lower its renewal requirement in the upcoming auction.

"Vodafone Idea has 46 MHz spectrum in 1800 MHz band and 6.2 MHz in 900 MHz due for renewal, and we expect very little renewal requirement for VIL as well," ICICI Securities said. The Department of Telecommunications (DoT) has released a notice inviting applications for the spectrum auctions in seven bands - 700, 800, 900, 1800, 2100, 2300 and 2500MHz bands, and the bidding is scheduled to begin March 1. The key date to watch for is February 5, 2021, the deadline for interested operators to submit their applications, ICICI Securities said. Morgan Stanley said it does not expect much activity in the 700 MHz auction "Unless Jio decides to build some capacity for potential 5G roll-out this year".