Idea Cellular doesn’t rule out bidding for 700 MHz band

NEW DELHI: Idea Cellular has not ruled out bidding for the 700 MHz band in the upcoming auctions, a top executive said, adding that every carrier will evaluate the bidding option till the last minute.
“Things keep getting discussed and various options keep getting evaluated till the event happens,” P Lakshminarayana, chief operating officer-corporate, said when asked if Idea would go for the super-premium spectrum. “Everybody will be evaluating everything in their knowledge till the event.”

“We have spectrum and as we get more consumers, we will need spectrum. We have been buying spectrum, as and when the need arises. We will continue to do that,” Lakshminarayana said, admitting that 4G will be a major play in the future and that its data user base will grow along with the expected data growth.

The Telecom Commission (TC) had last week cleared the largest ever spectrum auctions, likely to be held in July, including a debut for 4G airwaves in the 700 MHz band at a base price for Rs 11,485 crore a unit as suggested by the regulator, rates which have been criticized by the industry and analysts as too expensive that could potentially derail the sale.

At base prices, the auction of 4G bands of 700 MHz, 800 MHz, 1800 MHz, 2300 MHz and 2500 MHz bands, and 3G airwaves in the 2100 MHz band can generate almost Rs 544,000 crore for the government, or about five times the amount raised at the previous sale in 2015, if all spectrum on offer is sold. Just the 700 MHz band can contribute overRs 400,000 crore at starting price.

On its own, Idea may splurge a massiveRs 8,627 crore in adding data spectrum in key markets in the upcoming auction, brokerage HSBC said in a note to clients earlier this week. "Idea may add more data capacity in four circles and we see a potential spend of $1.3 billion in the upcoming spectrum auction by the company," HSBC analyst Rajiv Sharma said, without naming the markets.

Analysts, however, expect Idea to cherry pick data spectrum in its leadership circles like Maharashtra, Kerala, Madhya Pradesh, UP-West, where the company has seen a sharp surge in incremental revenue market share (RMS) over the past one year.

Idea has pegged its capex guidance for FY17 at over Rs 6,000 crore, which Lakshminarayana said will be aimed at improving customer experience.

The third largest carrier by subscribers expects that while the 3G and 4G technologies grow faster, data consumption per consumer will rise, a positive tailwind that makes up for investments made into improving network expansion via adding spectrum.

"We are investing just at a right time to make sure that happens. We are participating in 4G because we do believe 4G is going to be a major play into the future. That’s the reason we are investing in 4G and launched it,” he added.

Asked if the company plans to increase the tariffs, Lakshminarayana said India’s tariffs were among the lowest in the world, however costs are rising and so is competition, making the company achieve a fine balance between these two factors. “That balance is the Holy Grail, which we pursue all the time.”

The telco on Thursday entered into a carrier billing partnership with Google to provide its customers with direct payment option while buying digital services and content from Android Play Store.