2G spectrum auction: Reliance Jio's entry adds sharp edge to competition

Leading telecom operators contin-ued with aggressive bidding on Monday taking the total value of bids to Rs  58,333 crore at the end of the 49th round on the seventh day of the auction. Bidding will now spill over to Tuesday.

The government expect the bids to cross the Rs  60,000-crore mark as the dramatic entry of Mukesh Ambani-run Reliance Jio Infocomm (RJI) has added a sharp edge to the competition. The government had expected to garner around Rs 40,000 crore from the auction, but aggressive bidding by RJI has forced Bharti Airtel, Vodafone and Idea Cellular to raise the bar as they battle the newcomer to retain their 900 MHz spectrum to continue operations.

Telecom secretary M.F. Farooqui confirmed that the aggressive bidding for the premium 900 MHz band for 2G radio waves continued for Delhi, which has emerged as the most hotly-contested circle.

RJI, which is fiercely bid-ding for 900 MHz, is expected to launch its services around the mid-dle of this year. According to sources, RJI may com-bine the voice spec-trum it gets from these auc-tions with the 4G broadband spectrum they already have to offer high-speed but lower cost data services, which could be attractive especially for higher-paying data users.

"Reliance Jio's strategy is to get bandwidth from the ongoing auctions for its voice strategy and increase competition for incumbents Bharti Airtel, Vodafone India and Idea Cellular and undercut these companies' pricing power," a person involved with the com-pany's plans said.

If RJI doesn't get 900 MHz, it can push prices higher for the incumbents, launch voice services on 1,800 MHz and again play the price game. RJI has pan-India broadband band-width to offer 4G data serv-ices over LTE technology.

Courtesy: Mail Today