Wireless broadband bids may hit Rs 5,500 cr

BWA bidders eyeing LTE and 4G

Bhaskar Hazarika

New Delhi: With 11 companies filing for pre-qualification in the auction of the only two available slots of broadband wireless access (BWA) spectrum in each circle, the price bids could see stiff contest.

According to an ABN Amro equity research report, “Participation by global players like Qualcomm could intensify the BWA bidding. The higher competition could drive the BWA bid price to $1.2 billion (Rs 5,500 crore).”

This will be way above the reserve price of Rs 1,750 crore that the government has fixed.

According to the report, of the 11 pre-qualification applicants, seven are existing holders of the unified access service licence and internet service provider licence.

“Unlike in 3G, we expect bidders to take a pan-India approach, given the nascent market. While we estimate the BWA spectrum final bid at $1.1 billion to $1.2 billion, factoring in high competition, we do not rule out irrational bidding,” the report says

“The reason could be the participation of global players such as Qualcomm,” the report says. ‘Non-serious’ players may bid with a view to eventually monetising the licence or spectrum, it adds. The ABN Amro report says it has assumed four to five ‘serious’ bidders in each BWA circle.

The seven existing licence holders are Bharti Airtel, Vodafone, Reliance Communications, Idea Cellular, Tata Communications, Aircel and Tikona. The four new players that want to enter the filed are Qualcomm, Spice, Augere Mauritius and HFCL.

The auction of the BWA spectrum will be held on two days after the completion of the 3G auction. A senior official of the DoT said,“It is an unusual phenomenon. We did not expect such intense competition in BWA. The interest surpasses that shown in 3G.” He added that the BWA spectrum was efficient for long-term evolution and 4G services. Through BWA, operators would be able to offer high- speed wireless data services. Should the government allow voice-over-internet protocol (VoIP) or internet telephony, operators could use BWA to offer voice services as well. For BWA services, DoT will auction radio frequencies in the 2.3 GHz band unpaired and in blocks of 20 MHz. Sistema Shyam Teleservices president and chief executive Vsevolod Rozanov said that his company, as a new player, was not looking into 3G or BWA. “However, we see BWA as a business potential for India,” he said.

© Financial Chronicle