Telecom - Spectrum Auctions: Day 14 - Dwindling Action :: Edelweiss

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After no increase in prices on day 13, 900MHz spectrum prices increased in the Haryana circle by 3.0%, leading to overall price rise of 0.1%.  Prices for 800MHz and 1800MHz spectrum increased in 5 and 2 circles, respectively. The average discount for 800MHz over 900MHz further narrowed to 39.7%. There was no excess demand in any circle for 900MHz, 1800MHz and 2100MHz spectrum at the day’s close, while 800MHz witnessed excess demand in 3 circles. Bharti Airtel’s (Bharti) and Idea Cellular’s (Idea) renewal payouts were broadly flat at INR108bn and INR221bn, respectively, for 5MHz spectrum in each of the circles where their licences are due for renewal in 2015-16.

900MHz spectrum: Price escalation only in 1 circle

On day 14, 900MHz spectrum prices increased only in the Haryana circle by 3.0%, leading to overall price rise by 0.1%. At the day’s close, 900MHz spectrum prices were 87.2% higher than the reserve price. Bharti’s and Idea’s cost of replenishing entire spectrum stands at INR160bn and INR294bn, respectively, which is 72.5% and 74.5% higher than the reserve prices, respectively.

800MHz spectrum: Steady demand

800MHz continues to witness steady demand with price rise in 5 circles - Andhra Pradesh, Delhi, Madhya Pradesh, Maharashtra and the North East, where prices escalated by 6.1%, 3.0%, 9.3%, 6.1% and 3.0%, respectively, leading to overall price increase of 3.3%. Prices of 800MHz spectrum moved up by 63.2% over the reserve price on like-for-like basis, but it is still cheaper than 900MHz spectrum by 39.7%. In 3 circles (Delhi, Maharashtra and North East) demand for 800MHz spectrum continued to be in excess. For 1800MHz, price increased in 2 circles, viz., Himachal Pradesh (1.4%), and Kerala (2.0%) leading to overall rise of 0.1%.  There was no excess demand for 1800MHz and 2100MHz spectrum.

LINK
https://www.edelweiss.in/research/EdelFlash-Telecom--Spectrum-Auctions-Day-14--Dwindling-Action/28628.html