The strengthening of spectral footprints by Bharti Airtel and Reliance Jio in the auctions which have just concluded should generate market share gains for the two telecom operators, arming them with a lasting advantage in the long term and for the 5G game, according to analysts.
Once the auctions are over, it would be essential to monitor Vodafone Idea Ltd.’s balance sheet. (VIL) and its possible capital increase, price hike signals, the unveiling of a Jio-Google smartphone and 5G spectrum auctions, they noted.
Analysts from all walks of life have endorsed the government’s view that at ₹ 77,814 crore of total bids, the result and response of spectrum auctions had exceeded expectations.
Goldman Sachs noted that Bharti and Jio had “significantly” increased their spectral footprint, and that strengthening RF holdings “could improve their market share while keeping investments under control.”
In all service areas and bands, spectrum was sold at reserve prices, indicating that this higher than expected participation was due to telecoms operators seeking to secure their spectrum needs in the medium term rather than the result of a bidding war, the company said.
“ Prices may increase ”
The more than expected participation of telecom operators in auctions increases the likelihood of a price hike as a way to offset the increased leverage, market watchers said.
“While the March 21 auction was largely a non-event for Vodafone Idea, the company’s limited ability to participate in future 5G spectrum auctions (due to its stretched balance sheet) could lead to further erosion of its market share, ”Goldman Sachs said. .
Moody’s Investors Service said spectrum renewals will help incumbents protect their market positions, while additional bandwidth purchases will improve network coverage.