Telecom operators to fork out Rs 1 lakh cr in auction: ratings
Leading ratings agency Crisil on Monday said India's telecom operators will have to shell out Rs 1 lakh crore to buy spectrum in the forthcoming auction expected in the next 2-3 Amonths.
"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 Crisil Research Director Ajay Srinivasan in a statement.
According to Srinivasan, augmenting network capacity and spectrum holdings will be critical for maintaining telecom companies competitive position.
Crisil arrived at this figure by analysing circle-wise market position and spectrum holdings of operators, trends and the excellent growth predicted in data usage along with the likely competitive scenario.
Of the estimated Rs 1 lakh crore expenditure, private telecom operators are slated to account for 75 per cent.
"The government plans to put on the block over 2,300 MHz of spectrum across seven frequency bands at the forthcoming auction - the highest quantity of airwaves that's being sold at one go," said the statement.
Further talking on participation in the actuion, Srinivasan said it will be healthy as major telecom companies are experiencing network congestion in circles with high data consumption.
The ratings agency noted that large players would need external funding of nearly Rs 50,000 crore to mee their spectrum and network investments in the next two years.