Gold Silver Reports — Vodafone, Idea Take the Plunge with 2500 MHz 4G Airwaves — Vodafone India and Idea Cellular appear to have bet on 4G airwaves in 2500 MHz band much in the way Reliance Jio Infocomm and Bharti Airtel banked on 2300 MHz spectrum six years ago.
Experts said Vodafone and Idea have taken the plunge amid a rapidly evolving devices ecosystem in 2500 MHz band in China besides the lower price of these airwaves.
Idea’s leadership, in fact, told analysts recently that since the ecosystem of the 2300 MHz band had, historically , developed after widespread adoption in China, it expects a similar `spillover effect’ in 2500 MHz band. China has already allocated this band and deployment is expected to happen fast, it said.
Idea’s management recently guided for a rollout on this 4G band over the next two to five years as the ecosystem matures.
Brokerages expect the 2500 MHz band devices ecosystem to evolve quickly in India thanks to Vodafone and Idea investing in them.
Nearly , half the `20,280 crore that second-largest carrier Vodafone spent at the auction went to 4G airwaves in the 2500 MHz band in 15 circles, while No. 3 Idea spent `2,520.8 crore on the same in 16 circles. Both have done so to compete with Jio and Airtel, which already have pan-India 4G holdings.
Experts said Vodafone and Idea’s faith in a 4G spectrum band that virtually has no devices ecosystem in India mirrors the decisive steps Jio and Airtel took back in 2010, when their bids for the similarly untested 2300 MHz band were questioned. But 2300 MHz emerged as a key 4G band for data services in the last auction. That’s been helped along by carrier aggregation, which facilitates greater speeds and capacity , experts said.
Citi Research expects an `acceleration in ecosystem development’ around the 2500 MHz band following recent allocation of these 4G airwaves to Chinese telcos, cou pled with the latest purchases by Vodafone and Idea.
Analysts said Jio and Airtel’s additional 2300 MHz spectrum purchases this time round also compelled Vodafone and Idea to target the more affordable, albeit underdeveloped 2500 MHz band, to bolster capacity spectrum without jacking up prices.
Brokerage Edelweiss said capacity spectrum purchases were imperative for Vodafone and Idea to sustain their competitive edge in leadership circles. “Operators (VodafoneIdea) are banking on developing the ecosystem with significant deployments in 2500 MHz globally , including China.“
But HSBC’s Rajiv Sharma does not expect commercial deployment of 2500 MHz spectrum before the next 12-18 months since the devices ecosystem remains thin, notwithstanding some 4G LTE deployments in the band in China.
However, the foreign brokerage expects Vodafone and Idea to benefit if they consider active infrastructure sharing since both companies have added 2500 MHz spectrum in 12 overlapping circles. — Neal Bhai Reports