Idea Cellular emerges highest bidder for spectrum with bids of around Rs. 30,100 cr

BANGALORE, INDIA: Idea Cellular has won 54 MHz of 900 MHz Spectrum, out of overall win of 79.4 MHz Spectrum, for nine of its service areas covering over 73 percent of the company’s revenues. The total spectrum bid made by Idea is valued at approximately Rs. 30,100 crores. The company will be availing of the deferred payment facility offered by the government and likely to pay Rs. 7,732 crores as upfront payment, and the remaining amount in 10 equal annual installments starting after a moratorium of  two years.

Idea’s successful bid has helped it retain its spectrum in the 900 MHz band ensuring business continuity and customer service for over 106 million subscribers in these nine markets and related benefit for Idea’s overall subscriber base of over 155 million.

In this spectrum auction, Idea has also acquired additional spectrum in the 1800 MHz band in six key service areas, 2100 MHz in the strategic metro market of Kolkata, and additional 5 MHz on 900 MHz in Maharashtra for second carrier of 3G services. This will enable Idea to further expand its 3G services to 13 circles covering 80 percent of its overall revenue and enable 4G roll out on 1800 MHz in 10 service areas covering 61 percent of Idea’s gross revenue.

The 9 MHz spectrum won in Maharashtra will enable Idea to deploy 3G services on 900 MHz (in addition to the existing 2100 MHz band). Idea will therefore have 3G networks of 900 MHz band in Maharashtra and Delhi, which as per the Q3FY15 TRAI data are No.1 and No. 3 markets in India.

Idea’s participation in the auction was necessitated due to the renewal of its licenses due in December 2015 /April 2016 across nine key markets namely Andhra Pradesh & Telengana, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh & Chhattisgarh, Maharashtra and Goa, Punjab and UP West, where it held the most efficient spectrum band of 900 MHz. These markets collectively represent nearly 70 percent of Idea’s subscriber base and contribute 73 percent of the company revenues.

With the acquisition of 79.40 MHz across three spectrum bands of 900, 1800 and 2100 MHz in the recent auction, Idea now has a total of 270.7 MHz of spectrum on a pan-India level.

After this auction, Idea has managed to acquire /renew new licenses with liberalized spectrum for 16 out of the 22 service areas, which is among the highest for any telecom operator. The company has next renewal of only four service areas in 2021 and remaining two service areas as late as 2026.

With spectrum license renewal behind, the company will now return its focus on building the subscriber base, growing different steams of revenue and mobile data usage while providing a truly world class service to its 155 million customer base.