JUser: :_load: Unable to load user with ID: 544

Ovum: end in sight for India’s 3G auction saga - vision still fuzzy

Ovum’s new report, "3G spectrum licensing in India" outlines a number of issues which have caused auction delay, unresolved issues clouding future outlook and several contentious issues still to be resolved. For the author 3G spectrum auction is unlikely to attract additional new players or entice most of the new 2G licensees to participate.


According to a new report from Ovum, the 3G spectrum auction in India can be expected soon. However, there is still uncertainty about the number of blocks to be released. Although the decision will in itself have little impact on technology evolution, it will have important implications on the ability of the smallest two of the six existing private big players to participate and win spectrum.

"3G spectrum auction is unlikely to attract additional new players or entice most of the new 2G licensees to participate”, said Amit Gupta, Ovum’s Principal Analyst who is based in India and wrote the report. However, the government’s decision on the number of available 3G blocks to be auctioned will have some ramifications on the competitive landscape. “If all the blocks are auctioned then the smallest two of the six probable bidders – namely Idea and Aircel – might increase their chances (and ability to afford) of acquiring spectrum,” explains Amit Gupta.

Incumbents in the Indian wireless industry are in immediate need of 3G spectrum to add capacity to their strained networks and to offset decline in Average Revenue Per User (ARPU) by launching high-end value-added data services. Despite the industry’s needs, ambiguous policies, scarcity of spectrum in the possible 3G bands and difficult political environment have delayed the auction by many years.

Most of the contentious issues blocking the auction have been resolved. Therefore, Ovum says it is cautiously optimistic about the release of spectrum in coming months: the government does still have to make a decision on key issues such as the amount of spectrum to be released and the number of players allowed to participate in bidding.

Ovum does not believe that 3G spectrum will attract more new players in the industry. The decision on the amount to be released is likely to have little impact on the bidding strategy of the four largest players or on participation from new 2G licensees. However, if the auction is limited to only three blocks of 2x5MHz spectrum, Idea and Aircel - who are among probable bidders - will find it difficult to outbid their bigger rivals.

3G evolution for both GSM and CDMA operators is also clear as far as Ovum is concerned. For 4G, considering global trends, both types of operators are likely to adopt LTE and expected changes in the industry in next few years will facilitate that. Amit Gupta concludes, “Although 3G spectrum in India is much needed and should be auctioned soon, its impact on competition and technology evolution is overstated.”

More info:

Sign-up to our weekly newsletter

Keep up-to-date with all the latest news, articles, event and product updates posted on Developing Telecoms.
Subscribe to our FREE weekly email newsletters for the latest telecom info in developing and emerging markets globally.
Sending occasional e-mail from 3rd parties about industry white papers, online and live events relevant to subscribers helps us fund this website and free weekly newsletter. We never sell your personal data. Click here to view our privacy policy.