Gurgaon/Mumbai: Data services have remained the major thrust area for the telecom companies as the number of data subscribers and the average data usage per subscriber per month is growing at a rapid rate.
ICRA expects that this growth would continue, leading to requirements of spectrum with data capabilities. Accordingly there has been spectrum trading / sharing as well as merger transactions which have been announced in the last few months. Bharti Airtel Limited has led the way in such transactions. Over the last one month, the company has completed two transactions to acquire spectrum in 1800 MHz band (from Videocon Telecommunications Limited) and in 2300 MHz band (from Aircel Limited). These are in continuation to the transactions undertaken by the company to bolster its 4G spectrum holding, making it the only company apart from RJio to have pan-India 4G spectrum. The other telecom operator who has been active in such transactions is Reliance Communications Limited with two completed transaction and one proposed transaction.
According to Mr. Sabyasachi Majumdar, Sr. VP, Co-head Corporate Sector Ratings, ICRA Ltd. “Spectrum trading / sharing and business mergers allow the spectrum holding of the telcos to get better aligned to its utilisation, thereby leading to greater efficiency. Moreover, spectrum trading allows smaller telecom companies to monetize their underutilized spectrum holdings, while it provides opportunity to larger telecom companies to amass spectrum outside the auctions. The latest transactions clearly indicate the need for spectrum with data capabilities amid intensifying competition. Bharti now holds the maximum amount of spectrum followed by Reliance Jio Infocomm Limited and Reliance Communications Limited. The trend of spectrum consolidation, both by way of merger of telecom companies as well as of spectrum, is expected to continue in the medium term, and would pave the way for improved network efficiency.”
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