Pan-Indian 3G spectrum could cost $2.3b: Pyramid

Dylan Bushell-Embling
08 Apr 2010
00:00

Operators wishing to acquire pan-Indian spectrum in the nation's upcoming 3G auction could have to pay up to $2.3 billion for the privilege, according to Pyramid Research.

The competition during the auction is expected to be intense, a Pyramid report said, to values that could exceed $2 billion even for non-nationwide coverage.

Pyramid expects the three licenses on offer in the majority of the nation to be snapped up by major players Bharti Airtel, Reliance and Vodafone Essar.

In five of India's 22 telecom circles, a fourth license will be offered. Pyramid believes these licenses could go to a consortium of smaller players.

The nine companies which have applied of a 3G license – Bharti, Reliance, Vodafone, Aircel, Etisalat, Idea, S Tel, Tata Teleservices and Videocon Telecom – are all existing 2G players in India.

With telecom spending in India expected to increase tenfold over the next 15 years to $93.8 billion, and mobile penetration expected to grow from 50% in 2009 to around 80% in 2014, there is great market potential for 3G, the report said.

But 3G is not essential for success in the highly stratified nation, because vast differences in connectivity between urban and rural areas leaves plenty of room for expansion via the 2G path, Pyramid added.

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