The upcoming auctions will be make or break for some operators. The circles where licences are up for renewal account for 89% of the country’s 900 million total users. Their revenue contribution to the government as annual licence fee is around 84% of the total AGR of R1.50 lakh crore. The reason is that there’s not enough spectrum available in either 900 MHz or 1800 MHz bands and to make matters worse the Centre is offering only 5 MHz in the 2100 (3G) MHz band.
Operators whose licences are coming up for renewal in 2015-16 basically have spectrum in the 900 MHz band but there’s very little spectrum in 1800 MHz as a back-up in case they fail in retaining the former. Had the government put the additional 15 MHz of 3G spectrum, the scenario would have improved as the spectrum pool would have got enlarged. Now, either some of the operators face the risk of losing their licences or bid so high that their business case goes awry with tariffs rising.