Spectrum auction: Vodafone big 2G winner, spends Rs 19600cr

Vodafone emerged as the big winner in the auctions. The company has spent over Rs 19,000 crore and has managed to retain its 900 megahertz spectrum in three crucial circles of Delhi, Mumbai and Kolkata. It has also acquired 1800 megahertz spectrum in 11 circles - Mumbai, Delhi, Kolkata, Karnataka, Kerala, Gujarat, UP East, Rajasthan, Haryana, Andhra Pradesh and Punjab.

The company significantly bought  4G spectrum for the next generation of mobile services in Mumbai, Delhi, Kolkata, Karnataka and Kerala, which make up over 50 percent of its current data revenues. “In Mumbai, we are able to provide both 2G and 3G on 900MHz. This is unique in India. We have brought forward the purchase of spectrum in some circles where our licences are due for extension in 2015, and purchased several blocks of 1800MHz spectrum to support our growing businesses,” the company said in a statement.

Vodafone has spent a total of nearly Rs 19,600 crore in this auction of which around Rs 5,600 crore will be payable in this financial year.

Marten Pieters, Managing Director  & CEO, Vodafone India said: “We are pleased to have secured our business for the next 20 years in three of our most important circles by buying enough spectrum to continue our successful journey. We have also opened the door to the next generation of mobile technology—4G—by acquiring 1800 spectrum in the places where we expect this market to take off first. Vodafone Mumbai is the only operator in India to have data capabilities on all the commercial spectrum bands: 3G on 900MHz and 2100MHz and 4G on 1800MHz.”

After 68 rounds of bidding spread over 10 days, the government on Thursday said it had concluded the spectrum auction. The government has mopped up more than Rs 61,000 crore.  The government had put up spectrum in the 900 Mhz band (45 Mhz) and the 1800 Mhz band (385 Mhz) on the block.

“The auction has raised over Rs 61,000 crores for the government, but much of this will end up as debt on the balance sheets of the mobile operators. Such high industry indebtedness will hurt operators’ ability to invest in the roll out of new technologies and invariably result in higher prices and reduced service levels for consumers.”

“Spectrum remains unsold in only a handful of circles. However, the industry is still spectrum starved compared with other countries and the appetite for spectrum in India remains high. To meet the ambitious broadband objectives more spectrum should be made available in all bands on reasonable terms.” added Marten Pieters.