Nov 01, 2012, 07.58 PM IST | Source: CNBC-TV18

Bidding at 2G auction will be more subdued: KPMG

KPMG partner Jaideep Ghosh explains to CNBC-TV18 that the retainment of 2,5 Mhz in the 900 Mhz may result in a more subdued mood at the 2G auction.

KPMG partner Jaideep Ghosh explains to CNBC-TV18 that the retainment of 2,5 Mhz in the 900 Mhz may result in a more subdued mood at the 2G auction.

Below is an edited transcript of the analysis on CNBC-TV18.

Q: What is reaction to the government's shift away from the policy of 100-percent refarming? What does it imply for the telecoms?

Jaideep Ghosh: Definitely the situation has turned for the better for those operators who hold significant spectrum. It could have been worse, but if this is the final decision then definitely it is a better than what it could have been at the end of this spectrum auction. In the immediate-term there will be two implications- one, in the spectrum auction that is to start 10 days from now, the bidding will be more careful and subdued bidding as 2.5 Mhz has been allowed to be retained.

Second, in the medium-term it would barely impact 50-60 percent of the initial estimate of the investment needed if the entire spectrum was to be refarmed.

Q: Why do you say that this would impact the auction for 1800 Mhz band? Are you saying that because some of the bidders who have put in bids maybe able to retain their 900 Mhz allotment?

Jaideep Ghosh: Yes, it could have an impact. That is what I am saying.

Q: How do you think this will impact Idea whose network is predominantly in the 1800 Mhz band? Would it make sense for Idea to retain its 900 Mhz spectrum or get it refarmed and move on?

Jaideep Ghosh: It may make sense for Idea Cellular to focus more on 900 Mhz by retaining 2.5 Mhz if that is allowed by the group of ministers and the Cabinet and then pitch for 900 MHz whenever the auction happens.

Q: The impact for Reliance Communication , because clearly in terms of the aggregate spectrum that Reliance Communication holds, is a pretty large chunk - what do you think will dictate their strategy going forward for their existing GSM spectrum?

Jaideep Ghosh: The existing GSM spectrum acquired in later years will not be getting impacted but the spectrum acquired previously in the 900 Mhz ban would be impacted significantly. However, if it can retain 2.5 Mhz in whichever circles it has in eastern parts of India that would again help them be more cautious in the forthcoming auctions and also less investment vis-à-vis complete refarming.

Set email alert for
Reliance Comm Idea Cellular


video of the day

Budget 2015-16: Revive capex through savings on cheap crude says Kotak Sec

Explore Moneycontrol

Copyright © Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of is prohibited.