India is on target for a US$13 billion windfall from an unprecedented auction of spectrum, with fierce bidding expected Wednesday.
Market leaders Bharti Airtel and Vodafone are vying with billionaire Mukesh Ambani’s Reliance Jio for third-generation spectrum in what is seen as the most expensive bandwidth sale in India’s telecom sector.
Incumbent operators are aggressively bidding to keep existing networks in urban markets while attempting to acquire fresh spectrum elsewhere, the Financial Times reported Wednesday.
“The stakes are high, there is no doubt about it,” said Nitin Soni, director at ratings group Fitch in Singapore.
“The licenses for all this spectrum is expiring, so operators need to buy it back it, or buy more to replace it. They don’t have a choice.”
India’s telecoms sector, the world’s largest by subscribers after China, is seeking to leave behind years of price wars and overregulation and invest in next-generation data services.
This week’s auction is especially important in a sector where telecoms operators have been forced to run networks with far less spectrum than competitors in other countries.
Speaking at the World Mobile Congress in Barcelona this week, Vittorio Colao, chief executive of Vodafone, India’s second largest operator by revenue, became the latest industry leader to attack India’s government for releasing inadequate spectrum at excessive prices.
“The main problem of doing business in India is the cost… in terms of spectrum, in terms of tax challenges, in terms of complexity.” he said.
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