Vodafone May Acquire Companies For Spectrum In India

[with inputs from Cerius Shah] Vodafone (NYSE: VOD) CEO Arun Sarin has said that the company will consider more acquisitions in India for the purpose of getting more spectrum, if the government doesn’t make it available to them, reports Dow Jones (NYSE: NWS). Sarin would, however, prefer spectrum directly from the government, which will obviously be cheaper. Sarin has been quoted differently by Dow Jones and Reuters: the latter report saying that Voda is open to buying spectrum from the market. I don’t believe that spectrum once granted by the government can be resold by any company, so the Reuters (NSDQ: RTRSY) and PTI reports appear to have interpreted his statement incorrectly. New entrants are guaranteed spectrum when given licenses, and there are some roll-out obligations. So perhaps Voda might consider acquiring some new players, without having to spend on a brand or on acquisition of customers. If one could simply buy spectrum from the market, Bharti Airtel would have probably done it already, since it was struggling for bandwidth for a few months last year. The spectrum is allocated on the following basis:

The Government increased revenues from spectrum allocation from Rs 25 crores in 97-98 to Rs 2,000 crore in 2006-2007. Voda currently has over 40 million customers in India, and adds around 1.5 million new customers each month, accounting for 38 percent of customers added between September and December last year. Details on the importance of India to Vodafone, at Mint. The company intends to invest $6 billion in India over the next three years.

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