Allowed Airtel to buy Videocon spectrum due to auction availability – Idea Cellular

ideacellularIdea Cellular today told investors that it withdrew from a spectrum trading deal with Videocon — allowing Bharti Airtel to buy the airwaves — after it became clear that spectrum in the same band was  coming up for auction next month.

TRAI  announced total quantum of spectrum that was available and prices. We realized that it is better for the company to go through the spectrum auction rather that the trading,” company CEO Himanshu Kapania said today.

Idea Cellular had, late last year, announced that it had agreed to purchase spectrum from Videocon in two circles — Gujarat and Uttar Pradesh West — for Rs 3,310 cr. The deal raised a lot of concern among investors as Videocon had purchased the spectrum just three years earlier at Rs 1,330 cr.

However, last month, Bharti Airtel announced it was acquiring the spectrum, along with those held by Videocon in four other states, for Rs 4,428 cr.

Soon after Idea announced its deal, reports quoting government sources indicated that due to rearrangement of slots, much more spectrum could be put up for auction in the 1800 MHz 4G band than had been expected. A total of 200 MHz,  or about 9 MHz per circle, would be available, according to reports.

Idea needs only 5 MHz per circle for its 4G service.

Kapania also said the company will not be very aggressive in the upcoming auction, and did not believe in buying spectrum now for services that will be launched three or four years later.

He, however, said advanced LTE services will be prevalent in India by 2018 or latest by 2020, and that these could offer speeds of 500 Mbps to 1 Gbps.

Kapania was also asked about the possibility of telecom operators in India entering into 4G intra-circle-roaming pacts of the type that they had resorted to when 3G services were launched. The CEO said some technological tests were going on and that he had nothing more to add about it right now.