New Market Report Now Available: Indian 3G auction results and their implications

Aug. 21, 2010 - PRLog -- The hard work begins now for Indian operators
The Indian mobile sector now stands at a key point as it begins the long, slow transition from the present land-grab for subscriptions to service innovation. Despite the intensely competitive environment and regulatory uncertainty, all of the winning bidders have made strong bets on the Indian mobile sector and are clearly there to stay. The fragmented 3G coverage maps will have to be filled in at the next proposed auction round in 2014.

Individual operators will feel varying degrees of financial pressure, but operators will now have to work hard to realign their balance sheets to cope with rising debt levels that will result from the raising of capital required for 3G network deployments. Operators will also have to factor in other prospective costs such as increased license fee burdens if the TRAI's new recommendations on licensing and spectrum management are adopted as policy by the DoT. As per Ovum calculations, incumbent operators, such as Bharti, Vodafone, and Idea, would have to pay at least $4 billion in spectrum and licensing fees combined, in addition to the combined $6.6 billion they have already bid for 3G.

Bharti, Vodafone, and MTNL all have strong cash reserves and are well placed to absorb rising debt. Reliance, Idea, and Aircel will be more dependent on external borrowings to finance their respective deployments and maintain their momentum. In fact, at the time of writing, Reliance's board had already approved a possible 26% strategic stake sale to inject fresh capital into the company.

The key will be to quickly drive revenue growth from 3G services. 3G will provide operators with an opportunity to escape the vicious circle of price competition with differentiated, data-centric services. The lower cost of providing voice services will also help margins and provide sorely needed capacity relief in major markets. Moreover, time to market for 3G services should be shorter than the global norm since many networks are supposedly 3G ready and require only channel card upgrades as opposed to a full overlay. On the device side, several 3G devices have already been seeded by many of the major OEMs, which will form a good foundation ahead of the inevitable promotional activities that are customary with new service launches by operators.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/76397_indian_3g_auction_result...

Report Table of Contents:

Executive summary
In a nutshell
Ovum view
The hard work begins now for Indian operators
Key messages
The 3G auction exceeded all expectations
No operator has secured pan-India coverage
Aircel and Idea are the big surprises of the 3G auction
Indian operators have their work cut out for them
Analysis
The auction was a relative success
Several "winners" emerge with fragmented coverage
Aircel and Idea are the big surprises of the 3G auction
The biggest winner is the Indian government

List of Figures
Figure 1:  Total 3G bid amount progression
Figure 2:  3G bid amount progression by day
Figure 3:  Total 3G bids by operator compared to number of circles won
Figure 4:  Percentage coverage of existing 2G subscriber base
Figure 5:  Relative premium paid by operator to subscriber coverage

About Ovum

Ovum fully understands convergence across telecoms, IT services and software. They invest heavily in researching what is happening in a market that is dynamic and full of risk and reward, analysing the changes and identify the threats and opportunities ahead for their clients. Ovum's team has extensive experience in the sector and is dedicated to 'getting closer' - to the industries they advise on, to the people they work for, and ultimately to the real issues determining how ICT markets behave. Ovum maintains a fluid, highly collaborative structure that brings the right range of expertise to each situation.  View more research from Ovum at http://www.fastmr.com/catalog/publishers.aspx?pubid=1006

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

# # #

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.