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4G services to improve as telcos beef up 4G capacity in spectrum auction: Analysts

Almost the entire spectrum acquired, including the 2300 Mhz band, in the recently concluded auction is likely to be used for 4G services, say analysts.

March 08, 2021 / 07:40 PM IST
In the spectrum auction, the government received bids for worth Rs 77,814.80 crore.

In the spectrum auction, the government received bids for worth Rs 77,814.80 crore.

Telecom analysts say that the mobile users can expect a significant improvement in the 4G services after the recently concluded spectrum auction.

In the spectrum auction, that concluded on March 2, 2300 MHz band was the most sought after band with 89.29 percent of it being sold. Of 560 MHz spectrum put for auction under the 2300 MHz band, 500 MHz found takers.

In India the 2300MHz band is primarily used for the deployment of 4G.

"Almost the entire spectrum acquired, including the 2300 Mhz band, in the recently concluded auction is likely to be used for 4G services. Operators are already in the process of shutting down 3G networks, and while 2G networks are likely to continue in the medium term, new spectrum is unlikely to be used for 2G," said Kunal Vora, Senior Telecom Analyst, BNP Paribas.

Sub Ghz spectrum (800 Mhz/900 Mhz) will help operators improve their 4G coverage while 1800 Mhz and 2300 Mhz spectrum will help enhance capacity. Thus, it is fair to expect an improvement in 4G network quality as the new spectrum is put into use," Vora added.

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In the spectrum auction, the government received bids for worth Rs 77,814.80 crore.

"There has been an increase in the data consumption over the last few quarters, and this has been further fuelled by work from home, online classes, etc in the wake of the COVID-19 pandemic. The telcos have expanded their footprint in the 2300 MHz band spectrum to bolster their holdings to cater to the rising mobile broadband usage, thereby translating into need for improving network capacity," noted Ankit Jain, Vice President, Corporate Ratings, ICRA Ltd.

Bids were received for radio airwaves in the 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz bands. Spectrum in the 700MHz and 2500MHz bands remained unsold.

Reliance Jio emerged as the biggest buyer by acquiring a total of 488.35 MHz of spectrum for Rs 57,122.65 crore, followed by Bharti Airtel with 355.45 MHz at Rs 18,698.75 crore, and Vodafone Idea with 11.80 MHz for Rs 1,993.40 crore.

Jio bought spectrum in 800 MHz, 1800 MHz and 2300 MHz bands. Vodafone Idea bid only for 900 MHz and 1800 MHz bands, while  Bharti Airtel spread its requirement across 5 bands - 800 MHz,900 MHz, 1800 MHz, 2100 MHz and 2300 MHz.

"Bharti has acquired 355.45 MHz of spectrum across sub-GHz, mid-bands and 2300 MHz in 19 out of 22 circles for a total consideration of Rs 18,700 crore. Bharti now has pan-India spectrum in sub-GHz band, which will allow it to improve coverage in urban areas and expand coverage in rural areas catering to an incremental 90 million potential customers. It has also enhanced presence in 1800 and 2300 MHz bands to expand its potential service capacity," Kotak Institutional Equities said in a report.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
Shreeja Singh
first published: Mar 8, 2021 07:40 pm

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