India's top three mobile phone network operators have spent a combined Rs 85,231 crore in a government auction of airwaves to secure almost 80% of the spectrum on offer, reinforcing their positions in the world's second-biggest mobile market.
India's top three mobile phone network operators have spent a combined Rs 85,231 crore in a government auction of airwaves to secure almost 80% of the spectrum on offer, reinforcing their positions in the world's second-biggest mobile market.
The heavy bidding reflects their confidence in the potential for data traffic in the world's fastest growing smartphone market, while also stoking concerns about debt levels in an industry which is already among the most leveraged in Asia.
"The outcome of this auction ... will eventually lead to a significant outflow of funds and further burden the industry, which already remains under a debt of Rs 2.5 lakh crore," Cellular Operators Association of India said.
Altogether India raised $17.6 billion in the auction after 19 days of fierce bidding, of which the government expects to receive about Rs 28,872 crore in initial payments, telecoms minister Ravi Shankar Prasad said on Thursday.
Idea Cellular, the country's third-biggest mobile operator by market share, spent Rs 30,306 crore in the auction, the single biggest amount spent.
Bharti Airtel paid Rs 29,310 crore, while Vodafone India spent Rs 25,959 crore, according to figures provided by the minister.
Auction revenues are much needed by the government to help it meet an ambitious budget target. The winners have until April 4 to make the upfront payment.
"I would very earnestly appeal to the companies that national revenue is equally important for growth and India's image," the minister said, appealing to winning bidders to submit initial payments before the current fiscal year ends on March 31.
Earlier on Thursday the country's top court allowed the government to announce the auction results, but said frequency allocations could not be made until it rules on complaints over the sale mechanisms.
For India's wireless carriers the auction is the only way to renew 20-year network licences and build the extra capacity needed to cope with the growing data traffic as more Indians use mobile phones to go online.
However, the operators also face increased competition from cash-rich conglomerate Reliance Industries Ltd's telecoms unit, which is widely expected to launch 4G mobile broadband services this year.
The unit, Reliance Jio, spent Rs 10,077 crore in the auction.
The high prices paid by network operators in the auction, more than a third over the government's expectations, is likely to help the larger companies strengthen their positions and could lead to further consolidation in the market, analysts said. --Reuters
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