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Top India mobile operators to bid in 3G auction

19 марта 2010

The race for India's third-generation bandwidth has begun with the country's top three mobile phone operators and one smaller rival Thursday filing applications to bid in a long-awaited auction.

Bharti Airtel Ltd. the country's largest mobile phone operator by subscribers, and its immediate rivals Reliance Communications Ltd. and Vodafone Essar Ltd. are vying for a slice in the spectrum.

The high-speed services that it will give them will attract fatter premiums for multimedia capabilities in a market filled with cut-throat competition and shrinking margins.

A person familiar with the matter said that Tata Teleservices Ltd.--in which Japan's NTT DoCoMo Inc. holds a 26% stake--has also applied for a slot of the pan-India bandwidth, or spectrum. Tata Teleservices currently runs mobile services through the global system for mobile communications technology under the TATA DoCoMo brand.

Bharti Airtel, Reliance Communications and Vodafone Essar, the local unit of the U.K.'s Vodafone Group PLC, will all bid for one slot each of the pan-India bandwidth, executives from the three companies told Dow Jones Newswires separately.

The Indian government will auction three slots in 17 telecom service areas and four in the remaining five areas on April 9 in the fastest growing market for mobile services by number of subscribers.

The bids will start at INR35 billion for a slot covering all the service areas.

The slots that are up for auction exclude those already allotted to state-run Bharat Sanchar Nigam Ltd. and Mahanagar Telephone Nigam Ltd., the only two companies currently offering 3G services in India.

The successful bidders would be allowed to offer 3G services on commercial basis from Sept. 1, 2010.

March 19 is the deadline to submit applications for the 3G auction and the separate broadband wireless access, or BWA, spectrum auction. Both have been delayed three times since January 2009 due to disagreements over the base price, the number of slots to be sold and the bandwidth availability.

Analysts say 3G will also help existing operators make up for a shortage of second-generation spectrum, especially in larger cities.

"Spectrum is a scarce commodity, and considering the spectrum scarcity faced by the telecom service providers led to high congestion levels, we expect all of the operators to bid aggressively during the auction process," Daiwa Capital Markets said in a recent report.

The service areas where the government plans to auction three slots each include Mumbai, Delhi, Kolkata, Gujarat, Maharashtra and Andhra Pradesh, where bidding is likely to be intense as the percentage of people using mobile phones in these areas is higher than others and mobile users may pay a higher fee for 3G services, say analysts.

"I think it is going to be a very aggressive bidding and we are going to go well above the reserve price (specially for the major service areas). On a pan-India basis, we can see prices which are at over two times the overall base prices for 3G and 1.5-to-2 times for BWA," said Kunal Bajaj, managing director of telecom consultancy BDA Connect India Pvt. Ltd.

Daiwa expects operators such as Uninor--a joint venture between Unitech Ltd. and Norway's Telenor ASA--and Aircel Ltd."to bid aggressively only in some lucrative circles, like the metros..."

New entrant Uninor late February said it would not bid for a pan-India 3G license, while Aircel earlier this week said it plans to bid for 3G bandwidth, but didn't elaborate.

Another major player Idea Cellular Ltd. didn't offer an immediate comment on whether it has applied. Previously, it showed interest in bidding for 3G spectrum.

Broadband Wireless Auction

Local telecommunications services provider Tata Communications Ltd. said it intends to participate in India's BWA auction, joining U.S.-based Qualcomm Inc., which Wednesday said it had applied.

"We will finalize our funding plans for the broadband business, including evaluating the option of a strategic investor, after the completion of the auction," the Tata group company said in a statement.

India plans to auction two slots of radio bandwidth for BWA technology, with the base price for one pan-India slot set at INR17.5 billion.

The BWA auction is slated to start two days after the close of the auction for 3G bandwidth.

Источник: Total Telecom

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