We expect the upcoming auction to be restricted to airwaves coming up for renewal, says ICICI Securities

Reliance Jio, Bharti Airtel and Vodafone Idea would want to shell out practically Rs 50,000 crore mixed to resume their expiring spectrum permits within the upcoming spectrum public sale starting March 1, say analysts. However, Bharti Airtel and Vodafone Idea are unlikely to resume most of their airwaves, given their surplus holdings.

The upcoming public sale between three telcos is anticipated to be tepid as analysts say it’s a purchaser’s market and Jio is anticipated to be the most important contender.

“With fewer operators in the system and Vi unlikely to bid much, we do not see aggressive bidding in these auctions. Hence, while telco stocks have generally underperformed the Sensex in the run-up to auctions (on fear of increasing leverage), we do not anticipate the same this time around,” stated Morgan Stanley in its report.

Another brokerage agency Credit Suisse expects Bharti Airtel to spend about Rs 15,000 crore and rival Jio to pay Rs 24,000 crore to purchase airwaves.

However in case of Jio, the spectrum bought could be renewal of 44MHz of its airwaves which was purchased from Reliance Communications (RCom). The Mukesh Ambani owned telco may even purchase 55MHz of spectrum presently owned by RCom, within the auctions.

Rival Airtel however has 12 MHz / 47 MHz of spectrum expiring throughout 900 / 1800 MHz bands and at reserve worth, it could value the second largest telco Rs 6,700 crore as upfront cost. But the telco might not go for full renewal because it has amassed enough spectrum holding through acquistions

Credit Suisse pegs Jio’s upfront cost to be round Rs 6,000 crore, if it opts for long run funding.

The analysts largely don’t count on Vi to go for the bids since it’s sitting on extreme spectrum and can’t afford a dent in its coffers.

“VIL’s large spectrum holding, relatively under-utilized network and liquidity issues make us believe that it is unlikely to bid for much spectrum,” stated BNP Paribas in its report.
In the discover inviting functions (NIA) – the principle public sale doc containing all guidelines – issued on Wednesday, the telecom division stated it could promote over 2,250 MHz of airwaves throughout seven 4G bands — from 700 MHz to 2500 MHz bands.

The worth of spectrum in a debt laden sector, beneficial by the telecom regulator after which accepted by the telecom division , has been a bone of competition between the federal government and the telcos.

At reserve worth, spectrum value Rs 3.92 lakh crore are on supply however sure bands just like the 700 Mhz won’t see takers , on account of its costly price ticket.

“We expect the upcoming auction to be restricted to airwaves coming up for renewal, and we don’t expect the 700MHz spectrum to find bidders,” stated ICICI Securities on Thursday.

Telecom Regulatory Authority of India (TRAI) had refused to budge on the worth of the airwaves regardless of business pleas, which in flip will make this public sale a purchaser’s market.
“In our view, spectrum auction in India has turned into a buyer’s market. We expect minimal competition with operators picking up spectrum that provides best value for money instead of focusing on renewing all their expiring spectrum,” stated BNP Paribas. The Greater India