The last several weeks saw large scale betting for the war in Indian telecom spectrum for 3G, eventually raising over Rs. 67k crores or in excess of USD 14billion. End result being that not one single 2G operator actually got pan-India spectrum for 3G and there has been a mish mash of overlapping circles based on the bidders’ perceived value of those circles. There are different interpretations of which operator got the best deal and who ended up paying more for spectrum and which circles are right and which ones have low 3G potential and so on.

The banking and financial institutes have now got to make their own analysis on how much to believe the story of the operators seeking spectrum and to what extent they want to ride this multi-year, multi-billion dollar high-risk game. At the same time, established operators with over 100mil subscribers such as Reliance are attempting to restructure ownership and divest part-holdings either in anticipation of limiting risk exposure or focus on higher growth sectors such as broadband / data and content.

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One view of this sector perhaps is that the era of voice is finally ending. This is not to say that voice revenues are suddenly unimportant but the industry is definitively making an exit from the Voice-only highway it so far traversed. Thanks to 3G, a whole slew of things will likely happen. Here is our unaudited view of life in the new lane:

• Falling tariffs for voice calls will now be history; expect price consolidation for voice-only plans, in fact there could even be a slight ramp upward
• Voice will lose priority as a revenue payload and data strategies will become crucial, making way for content-strategies in the year ahead. As a result, content licensing, IPR protection, anti-piracy will begin to be stringently policed: talk about pirated Bollywood content for example.
• Telco M&A is a certainty; are you surprised that RCom has authorized 26% dilution in a hurry and Etisalat is in discussions for 25% equity in the firm? Talking about Reliance, could Mukesh be looking to re-enter telecom? How about a breakthrough strategy in broadband? It is time after all – we haven’t seen anything like it ever in India. Expect free Internet access for starters and content-based charging: a one percent commission to ISP on every transaction, custom access devices and pay-per-view or as-you-go but access fee is zero, rentals are history!

• A pure-play 2G player with no 3G should quickly build up a presence using BWA spectrum. Or plan to exit.
• Roaming across 3G operator zones will become crucial and therefore network sharing will be predominant. Managed services in shared networks will become the expected norm as operators will demand equipment vendors to plug the gaps in their network to ensure seamless nationwide coverage.
• Wi-Fi ISPs have a window of opportunity to really build-out and exit profitably if they have a loyal customer base, and a dependable high-footfall network. They will be suddenly in demand!
• Despite their best efforts some telcos with 3G licenses, will simply not be able to meet financial milestones going by the current borrowing rates as their EBITDAs will remain negative for 5-6 years.

• The real winner of the entire exercise is the Government. However, with all the favoritism including one-year advance launch of spectrum, likely waiver of spectrum fee, incumbent telcos will become the government’s Achilles heal.
• Down the road, India’s most successful ISP will be also a UASL holder but some content-players could become very large and powerful within the next 5 years. Broadband players may end up with bulk of their revenues coming from devices we have never seen today and IP-end point proliferation will likely be a measure of an operators’ might (read M2M). Everything from paying at gas-station to milk-vendors to managing the microwave from car will use some aspect of the spectrum you just bid for.
  Thus these spectrum wars are not about voice ARPUs but about the future of India’s digital economy, its spread and power to reign over the next 20 years. If you bid and won a piece of spectrum, perhaps you didn’t over pay after all…

Operators with more than 6.2 MHz of spectrum in GSM will have to cough up more if the Telecom Regulatory Authority of India (Trai) has its way. Trai is recommending sweeping changes in the country’s telecom landscape by replacing the current subscriber-based allocation of 2G spectrum… more

With the third generation (3G) game over, for now, telecom operators are staring at the possibility of having to pay Rs 1,03,000 crore to the government when their 2G airwave licenses come up for renewal, beginning 2014.more

At the closer of the India’s 3G auctions, most of bidders including the biggies Bharti Airtel, Vodafone and Reliance Communications emerging winners for the 3G airwaves.  more

With smartphone increasingly picking pace with the consumer community, it is not only handset manufacturers which are proactively and aggressively working to cash on the opportunity. Reliance Communications…more

MCD resumes sealing illegal telecom towers in Delhi

The Municipal Corporation of Delhi began sealing illegal telecom towers in Delhi following expiry of deadline last Friday for the operators to apply for consideration of all illegal towers. more