Why Jio launch is not good news for Vodafone and Idea Cellular
8 years ago Admin 0
Reliance Jio offering free unlimited voice calls and SMS and data at low rates will force major telecom companies to review their strategy for the upcoming auctions. It is expected that Vodafone and Idea Cellular will now spend more on upcoming spectrum due to amazing offers by Jio.
As per analysts Vodafone and Idea Cellular will have no option rather than bidding 4G data airwaves. Idea is likely to spend Rs. 4,000 crore and the same applies to Vodafone as no choice left to sustain as important players in the telecom market. Spectrum auctions will be held in next month.
A government official expects bidding intensity for 4G airwaves to increase in the upcoming sale. Idea has 4G airwaves and services in 10 of the country’s 22 circles while Vodafone has 4G airwaves in 9 and services in 8. Vodafone will launch 4G in West Bengal, its ninth circle, by the year-end. In comparison, both Airtel and Jio have a pan-India presence.
It added that Vodafone and Idea “will close a lot of these spectrum gaps in the auction scheduled to start at the beginning of October,” a view backed by IDFC Securities who expects both to bid “aggressively”.
Bharti Airtel has the largest spectrum holding at present, of the total 770MHz, across bands (900MHz, 1,800MHz, 2,100MHz and 2,300MHz), followed by Reliance Jio Infocomm, which holds 596MHz spectrum across 800MHz, 1,800MHz, and 2,300MHz bands. Both telcos have a pan-India presence when it comes to 4G spectrum holdings.
Rajan Mathews, the director-general of the GSM industry body, Cellular Operators Association of India (COAI), said that “some operators” will have to bid more to be able to compete with Reliance Jio on a complete IP network. He didn’t name the telcos.
Kapoor added that since market leader Bharti Airtel had already built its capacity in the last few auctions, it had the luxury to bid selectively. “They can decide to simply reform their 2G (1800 MHz) spectrum to 4G. They don’t have to take as hard a position in these spectrum auctions,” he said.
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