Idea might spend more than Rs 8600 crores in the July spectrum auction

Idea Cellular, the Indian mobile network operator based in Mumbai, might spend a whopping $1.3 billion (Rs 8,627 crore) to buy data spectrum in key Indian markets in the upcoming auction that is supposed to take place around July. On the other hand, Bharti Airtel, the leader in the market, might choose to buy selective 4G airwaves in the coveted 700 Mhz band in a few circles, as they are cheaper than the 900 Mhz spectrum.

Analysts, however, expect that Idea will cherry pick data spectrum in circles like Maharashtra, Kerala, Madhya Pradesh, UP-West, where it has seen sharp rises in incremental revenue market share (RMS) in the past year.

Sunil Mittal-led Bharti Airtel can choose to selectively add 700 MHz airwaves in markets where the liberalised 900 MHz 3G spectrum doesn’t already exist. "Bharti Airtel may add 700 Mhz spectrum in a few markets where it is either priced at par or lower to 900 MHz spectrum as it could help the company address indoor data coverage issues, especially where it cannot use 900 MHz airwaves for 3G deployments," said brokerage HSBC.

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As per the Telecom Commission, the approved base prices of 700 Mhz spectrum in UP-East, UP-West and Bihar are at Rs 459 crore, Rs 384 crore and Rs 248 crore, respectively. These figures are considerably less than the reserve price of 900 MHz spectrum in the same circles, which are at Rs 776 crore (UPEast), Rs 739 crore (UP-West) and Rs 444 crore (Bihar).

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