MUMBAI: Reliance Jio is likely to acquire some of the 800Mhz band spectrum of Reliance Communications (RCom), which it is using and is coming up for renewal in the upcoming bandwidth sale starting March 1, while Bharti Airtel may buy additional spectrum in the 800 MHz and 900 Mhz bands, but, like Vodafone Idea, not renew most of its expiring airwaves, say analysts.
Overall, telcos are likely to bid for a combined only 20-30% of the six 4G bands on offer between 800 MHz and 2500 MHz, which are worth around Rs 2 lakh crore at base price, but largely give the 700 MHz band a miss, given its high price—38% higher than the 800 MHz band on average and 56% higher in three metro circles—say experts.
They added that the final winning bids across spectrum are likely to be the same as the reserve prices given the large spectrum supply and likely limited demand for expiring airwaves.
The government is putting up for sale over 2250 MHz airwaves across seven 4G bands worth Rs 3.92 lakh at reserve price, a bulk of which is made of the 700 MHz band in value terms.
“We expect Jio to not only renew around 44MHz of its spectrum, which was bought from RCom, but also buy around 55MHz of spectrum currently owned by RCom in the auctions (which it has been using),” Credit Suisse said in a note. “This would entail spectrum capex of around Rs 240 billion (Rs 24,000 crore) at reserve prices with upfront payment of around Rs 60 billion if it were to opt for long-term funding.”
It further expects Jio to purchase additional spectrum beyond expiring airwaves as it will look to augment its network capacity, having garnered 35% subscriber market share and a much higher share of traffic.
Credit Suisse added that Bharti Airtel has 12 MHz and 47 MHz of spectrum expiring across 900 and 1800 MHz bands respectively.
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