Bharti Airtel
Winning 3G spectrum in 13 licences, Bharti Airtel is set to offer the widest 3G coverage in the country. Airtel commands a 2G revenue market share of 35 per cent in the circles where it has won 3G spectrum.
In the nine circles where the operator has lost, its ARPU is 15-20 per cent lower than the national average. However, the company is among the top three players in these circles in terms of number of subscribers. Therefore, there is a threat of losing this position as consumers switch to 3G services, especially when mobile number portability is introduced.
After its recent acquisition of Zain’s African operations, a panIndian 3G licence would have been a financial drag for the company.
A large part of Airtel’s network is 3G ready as the operator has been upgrading its networks over the past 24 months -? a step which will enable it to deploy 3G with a minimum capex by end-2010.
Vodafone Essar
Vodafone Essar has won only nine circles but these account for 68 per cent of its current 2G revenues and 57 per cent of its subscriber base. The company is among the top three operators in terms of revenues in these circles.
Vodafone’s strategy has been to maintain its strong position in Category A and B circles. It has stayed away from the Category C circles, believing that these have a lower revenue potential.
Vodafone evaluated its bids based on parameters like cost per MHz per person and penetration of 3G mobile handsets. Given the higher teledensity in circles where it has won spectrum, the spectrum cost per user is low compared to the circles it has lost. As per industry estimates, the company’s ARPU in circles where it has won 3G spectrum is Rs 244.20, while that for the circles it has lost is as low as Rs 162.30.
Idea Cellular
Idea Cellular has failed to win the coveted Delhi and Mumbai circles. It bid Rs 57.69 billion for the relatively less expensive 11 circles it won.
While these circles account for only 49 per cent of the country’s telecommunications market, they account for 77 per cent of Idea’s subscriber base and 81 per cent of its revenues. Besides, the operator is not among the top three in any of the circles it lost.
Idea has been emphasising that the demand for value-added services and telephony is the highest in rural India, and, therefore, it makes sense for the company to bet on these circles.
The operator’s ARPU in these 11 circles is Rs 199 compared to Rs 146 in the circles it has lost.
Reliance Communications
Reliance Communications (RCOM) has played its cards very strategically. It has won 3G licences in 13 circles for Rs 85.85 billion. The company has spent 76 per cent of its total investment on the Delhi and Mumbai circles. 3G operations in Delhi and Mumbai would give RCOM the opportunity to catch up with its peers. The company’s image, which is identified with low-cost offerings rather than high-end services, may change with its 3G operations.
RCOM’s ARPU in these 13 circles is Rs 119.90 compared to Rs 95.80 in the circles where it has lost.
Tata Teleservices Limited
Tata Teleservices Limited (TTSL) was one of the most aggressive operators when the 3G spectrum auctions started. But once the bid price started escalating, the company stepped back. TTSL winning in only nine circles, however, has been surprising, especially because 3G is the strong point of its JV partner NTT DOCOMO. The company has managed to protect only 43 per cent of its 2G revenue footprint. The operator’s 3G coverage of its 2G footprint is the lowest among the seven successful bidders. However, as a late entrant in the mobile space, company officials are happy that TTSL would be able to launch 3G services simultaneously with its peers.
Aircel
Aircel has surprised everyone by winning spectrum for 13 circles, which account for 90 per cent and 91 per cent of its subscribers and revenues respectively.
The company entered the auctions with the aim of protecting its leadership position in the circles where it had a strong position. It concentrated on circles like Tamil Nadu and the Northeast. Once it ensured this, Aircel looked for corridors of contiguity, and won all the southern circles as well as the Assam, West Bengal, Bihar and Orissa circles. It has also won 3G licences in the Jammu & Kashmir, Punjab and Uttar Pradesh (East) circles. Its bidding strategy was centred on the valueadded services potential of the circles, apart from maintaining the highARPU subscriber base.
S Tel
S Tel has been the only new telecom licensee to win the 3G spectrum auctions. A Batelco Group affiliate, the operator has secured 3G spectrum for its operations in Orissa, Bihar and Himachal Pradesh, paying Rs 3.38 billion. According to company officials, the investment in 3G spectrum forms part of the Batelco Group’s growth, diversification and expansion strategy in the Indian wireless and broadband market.
