New Delhi: Indian telecom operators are expected to fork out Rs 1 lakh crore to buy spectrum at the forthcoming auction expected to be held in the next 2-3 months, said rating agency Crisil on Monday. Of this nearly 75 per cent will be spent by private telecom operators. Crisil estimated that in the current fiscal, the outgo towards spectrum acquisition would be Rs 370 billion, which is lower than the budgetary estimates of around Rs 560 billion. However, Crisil said that it will still be a significant outgo for an industry reeling under Rs 4 lakh crore of debt as of March 2016.
This means that reliance on external funding is set to increase and they would need external funding of around Rs 0.5 trillion to meet their spectrum and network investments over the next two years. The government plans to put on the block over 2,300 MHz of spectrum across 7 frequency bands at the forthcoming auction - the highest quantity of airwaves that’s being sold at one go.
“Unlike previous auctions, operators this time do not face business continuity issues. Yet we expect reasonably healthy participation because incumbents will ramp up their 3G and 4G spectrum holdings ahead of Reliance Jio’s entry,” said Ajay Srinivasan, director, Crisil Research. He said that operators are already facing increased network congestion in circles with high data consumption (mainly metros and category A circles, which account for 60 per cent of data traffic), and augmenting network capacity and spectrum holdings will be critical for maintaining their competitive position.
