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India gets $9.8 billion of bids in spectrum auction

Bharti Airtel and Vodafone Group are among carriers that bid Rs611.6 billion ($9.8 billion) in India’s wireless spectrum auction.

India has 753 million active wireless subscribers. — Bloomberg

The government got Rs375.7 billion of bids for the 1,800 megahertz band in 22 regional zones and Rs235.9 billion for 900 MHz in the nation’s three largest cities, Suraj Radhakrishnan, vice president at e-Procurement Technologies Ltd, the auction facilitator, said by phone. The Department of Telecommunications will release details of winners on Thursday.

Success at the auction will enable billionaire Sunil Mittal’s Bharti, Vodafone and other operators to add to their offerings in the world’s biggest wireless market after China. Reliance Jio Infocomm Ltd, which has bid for spectrum, could also join the other carriers in competing for a share of business in India, where smartphone sales are growing at the fastest pace, and tap a surge in mobile data usage.

“Spectrum is a core necessity,” said Sachin Gupta, who heads equity research for Southeast Asia at Nomura Holdings in Singapore. “This auction is critical for the renewals and data growth,” Gupta said, referring to carriers whose permits are set to expire this year.

India had 753 million active wireless subscribers as of November, according to the Telecom Regulatory Authority of India. An increasing number of wireless users are switching to smartphones in the South Asian nation spurring carriers to raise broadband capacity.

Vodafone, which February 6 reported better-than-expected third- quarter service sales, said data use in India more than doubled in the period. Bharti’s mobile data revenue also more than doubled in the three months ended December.

The revenue from the auction will help India trim its budget deficit. Prime Minister Manmohan Singh aims to narrow the shortfall to 4.8 per cent of gross domestic product and prevent a credit-rating downgrade to junk.