Government Likely To Raise 90K Crore From Telecom Auction: Crisil

By siliconindia | Tuesday, 17 February 2015, 10:47 Hrs

Crisil said the 900 MHz spectrum, which is considered most efficient for wireless telephony, is expected to see the biggest demand from telecom players.

However, it said the aggressive bidding poses a "herculean task" before operators to grow their blended average voice and data revenue per minute by five paise. In the last 18 months, companies have been able to grow their ARPM by 2-3 paise - to 47 paise - on tariff hikes and growing data usage.

"Another increase of 5 paise will not be an easy task in the face of intensifying competition, especially in data. Ability to increase ARPM will be a key monitorable," Crisil director Manoj Damle said in the note.
Crisil's senior director Sudip Sural said the overall debt in the sector would go up by Rs 70,000 crore or a third of the sector at present.

Licences for over 60 per cent of the total 900 MHz spectrum currently held by large operators are up for renewal, the Crisil note said, adding that other players not having the prized spectrum in a circle would also bid for 900 MHz spectrum.

The ratings agency said that in the 900 MHz band, the bids would go up by up to 1.5 times of the base price because of scarcity premium, with some high-revenue circles commanding an even greater multiple.

For other bands it is expected to be moderate, the note said, adding that in the 1800 MHz band, operators already hold sufficient spectrum while in the 2100 MHz band, additional spectrum supply is expected in the near future.

Source: PTI