3G auction: How the gameplan could evolve

How the gameplan could evolve

 BHARTI Airtel
 SUNIL MITTAL
What's at stake With over 25 percent market share of telecom revenues, Bharti Airtel has a huge business and a reputation to defend. It also has a fixed-line broadband market that it is rolling out quickly. It can't leave a door open for a rival.

Expect it to Bid aggressively for mobile and BWA spectrum in most circles.

Finances End of FY 2009 it had Rs. 1,114 crore of cash. That has come down to about Rs 600-odd crore now but with strong franchise and an ability to leverage it has the maximum amount of dry powder.


VODAFONE ESSAR
MARTEN PIETERS
What's at stake Its ARPUs are still among the highest. It wouldn't want its high-value Blackberry clients to go to a newbie with a 3G license. But, it paid USD 9 billion in 2000 for the UK 3G license and hasn't forgotten the effects of that.

Expect it to Bid aggressively for most cellular 3G circles but go easy on BWA (broadband wireless access) spectrum, except in Mumbai, Delhi, Chennai and Bangalore.

Finances The parent has almost $7 billion in cash but the Indian operations have been showing cash losses for the last 18 months.


RELIANCE COMMUNICATION
ANIL AMBANI
What's at stake Reliance has two separate technology licenses - GSM, which is great for voice, and CDMA, which is great for data. It is using the CDMA license to push data aggressively. It doesn't need this frequency auction that much because it has spectrum in both frequencies right across India.

Expect it to Be quite conservative and pick circles carefully.

Finances Reliance Communications has about Rs 4,387 crore in cash according to the company's balance sheet for the year ending March 31, 2009.

TATA TELESERVICES
RATAN TATA
What's at stake After being almost dormant for a while, Tata DoCoMo is picking up traction. Its subscriber base has almost doubled in the past nine to 10 months. It has tremendous momentum on the high-speed data cards business as well.

Expect it to Bid aggressively for the key circles and also for BWA as that holds the key for high-speed data.

Finances NTT DoCOMo has put in $2.7 billion in India. NTT DoCoMo
and the Tata group can write out cheques with significant number of zeroes on them.

 

AIRCEL
SANDEEP DAS
What's at stake Aircel neither has scale nor a differentiator as of now. With ARPUs crashing in voice and companies like Reliance Infocomm, Tata Teleservices and BSNL/MTNL making a huge play for data, Aircel has to make a move now.

Expect it to Be aggressive and it could surprise Tata DoCoMo.

Finances Ananda Krishnan, the Malaysian tycoon who owns Maxis which has 76 percent of Aircel, has said it wants to invest $6 billion in the Indian market. A good part of that may get utilised in the auctions.

IDEA CELLULAR
SANJEEV AGA
What's at stake It is a very credible fourth player, but is not as widely distributed as the top three and is not as aggressive on the data side. It will focus on building out the voice business and getting scale there.

Expect it to Be conservative in bidding on a national level. It will bid strongly in Andhra Pradesh, Madhya Pradesh and Gujarat where it is among the leaders.

Finances Has around Rs. 2,695 crore. It is unclear whether it will want to leverage too much from hereon for a data business that it hasn't scaled much.


IMAGE CREDIT:- Sunil Mittal: Dinesh Krishnan; Anil Ambani: Kedar Nene/ Fotocorp; Ratan Tata & Sanjeev Aga: Sameer Joshi/ Fotocorp; Sandeep Das: Bazuki Muhammad/ Reuters

By: Shishir Prasad/ Forbes India

More from Forbes India

Rebooting Telecom   

Istanbul : Crossroad Of The World  

Stay Balanced, Hold on to Stocks with Reliable Cash Flow