Norway’s telecom operator Telenor is very much looking forward to the forthcoming spectrum auctions in India. It is reportedly interested in bidding for 900 MHz band held by Reliance Communications as of now.
The Economic Times reported that some people aware about the company’s plan revealed that Telenor is mainly interested in 6 out of 7 circles served by 900 MHz waves of RCom. RCom owns such radio-waves across the circles of Orissa, West Bengal, Bihar, Assam, Northeast, Madhya Pradesh, and Himachal Pradesh.
RCom’s licenses of 900 MHz waves across 7 circles are up for renewal next year, and thus has got Telenor interested.
This spectrum is expensive but highly in demand by telecom operators. Lower frequency Electromagnetic waves can travel very longer distances without losing much signal strength. So, a telecom operator building its network upon such waves has to install less cellular tower, and thus can reduce its initial investment.
Telenor is ignoring the circle of Himachal Pradesh saying that it doesn’t fit in their strategy for India. Telenor’s India unit- Uninor reported its first EBITDA profit last year convincing its parent company to invest money into it.
In India, 3G data contributes to a significant portion of market revenue for telecom companies. The fact that Uninor doesn’t hold 3G spectrum across any of its circles inhibits its growth.
Uninor currently has 4% of Subscriber Market Share with its presence in circles of Maharashtra, Gujarat, Andhra Pradesh, Bihar, UP(east), and UP(west).
Uninor reported a loss of Rs. 104 crore in the last quarter. It needs an immediate change in strategy with a focus on high-speed data. “Clearly, you cannot survive being a niche (pre-paid) provider, and you must have a design for the future. So the upcoming auction may provide an opportunity to expand, but it has to be more than acquisition of spectrum.” said Kamlesh Bhatia, research director at Gartner.