Spectrum Available in Excess Supply
ICICI Securities said that “spectrum supplies across bands remain excessive” with the firm also including the spectrum up for renewal in 2021. The firm highlighted that Airtel has 57 MHz of spectrum in the 1800 MHz band along with 6.2 MHz of spectrum in the 900 MHz up for renewal in 2021. “[Airtel] has amassed huge spectrum via M&As, which should significantly lower its renewal requirement in the upcoming auction,” ICICI Securities said in its report. Similarly, ICICI Securities highlighted that Vodafone Idea has 46 MHz of spectrum in the 1800 MHz band along with the 6.2 MHz of spectrum in the 900 MHz up for renewal in 2021. The firm said that it expects “very little renewal requirement” for the third largest wireless operator in India as well. However, it has been said that Reliance Jio would require capital expenditure of Rs 28,000 crore to renew its expiring spectrum at reserve price. Motilal Oswal in a report in October said that the largest wireless operator in India has 115 MHz of spectrum in the 800 MHz band up for expiry in 2021.
ICICI Securities Says 700 MHz Spectrum “Very Expensive”
In its report, ICICI Securities said that the final reserve price for 800 MHz spectrum in the upcoming auctions is 18.5% lower than the reserve price set in October, 2016. The firm said that the reduction in the reserve price of 800 MHz spectrum “should benefit the relevant operators.” In comparison, ICICI Securities said that the final reserve price of the 1800 MHz band along with the 2300 MHz band are priced 14.5% and 17.5% higher respectively. While the 700 MHz spectrum reserve price has been reduced by 43%, the firm said that the price continues to be “very expensive.” “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,” ICICI Securities said in its report.
