India 3G Airwave Race Gathers Pace, Bids in April

Telecoms firms including Bharti Airtel, Vodafone and Etisalat will vie for third-generation (3G) Indian mobile spectrum in an April auction, as they clamour for capacity for new services. The next-generation technologies would allow high-speed Internet access and data transfer on mobile phones and boost usage of data services, where margins are higher. More spectrum would also improve the quality of voice services. It would also help those foreign firms not yet present in India to gain a foothold in a market that added a monthly average of nearly 15 million subscribers in 2009. With more than 550 million mobile users, it is the second-biggest wireless market in the world, beaten only by China. India has put on the block three 3G slots in most of its 22 telecoms service areas, while two slots per service area are up for grabs in a simultaneous but separate auction for broadband wireless access (BWA) radio airwaves. The 3G auction starts from April 9, and the BWA auction will kick off two days after it closes, the Indian government said last month. Friday is the last date for submitting interest to participate in the auctions, and officials expect more applications.

India's top three mobile operators Bharti, Reliance Communications and Vodafone Essar separately said on Thursday they had submitted applications to bid for the 3G airwaves for all of India's 22 telecoms zones. Abu Dhabi-based Etisalat, which has a telecoms joint venture in India, also said it had applied for the 3G spectrum bid, while two sources told Reuters that Tata Teleservices, India's fifth-ranked mobile firm and 26 percent owned by NTT DoCoMo, submitted its interest to bid on Thursday. Vodafone Essar has also expressed interest in BWA spectrum, the company said. U.S.-based chipmaker Qualcomm said on Wednesday it had applied to bid in the BWA auction to help it deploy fourth-generation long-term evolution technology (LTE) in India. The long-delayed auctions open up a new revenue stream for mobile operators in the world's fastest-growing mobile market as a vicious price war has pushed voice call charges sharply lower, hurting their margins. Bidding for 3G would start from a government-fixed base price of 35 billion rupees ($770 million) for all-India radio waves, but analysts expect each winner to spend between $1 billion and $1.5 billion due to the huge demand for scarce spectrum and cut-throat competition. For all-India BWA spectrum, the base price is 17.5 billion rupees. The government has pencilled in its budget for revenues of 350 billion rupees ($7.7 billion) from the auctions.

Published Date: Mar 19, 2010 03:36 pm | Updated Date: Mar 19, 2010 03:36 pm