Indian authorities just wrapped up an auction for the 2.3 GHz spectrum to be used for broadband wireless access (BWA) services; it raised a total of $5.5 billion, roughly half of the $11 billion raised during the 3G auctions. The biggest winner of the auction was Infotel, a privately held company that won licenses for all 22 regions, thus allowing it to become the largest wireless broadband provider in the country.
Interestingly, none of the 3G spectrum owners have a nationwide footprint, which gives Infotel a big leg up in wireless broadband services. This discrepancy alone should raise eyebrows, but so far I’ve not seen it brought up in the Indian media.
What’s more intriguing is that right after the auction closed, Mukesh Ambani’s Reliance Industries agreed to buy Infotel for $1 billion and said that it would pay the $2.74 billion Infotel would have had to fork over for the spectrum licenses. Mukesh’s estranged brother, Anil Ambani, who owns Reliance Communications didn’t win in the BWS auctions, though his company won many 3G licenses.
Their family rivalry makes me believe that there were some behinds-the-scene machinations that led to this deal. Was Infotel doing Mukesh Ambani’s bidding during the auction, thus lulling Anil’s camp into complacency?
Nevertheless, in an effort to increase his presence in telecom, Mukesh, the world’s fourth-richest man, is likely to start a wireless broadband pricing war, which could have a detrimental impact on other carriers that have spent billions buying 3G spectrum licenses.
Other big winners of the BWA auctions were Aircel (eight licenses, $747 million), Tikona Digital Networks (five, $227 million), Bharti Airtel (four, $720 million) and Qualcomm (s qcom) (four, $1.045 billion.) Qualcomm got licenses for the top circles in India: Delhi, Bombay, Haryana and Kerala. Its interest in buying the spectrum is to disrupt the rollout of WiMAX services in India and instead push the LTE agenda.
Reliance Communications, Vodafone (s vod) Essar, Idea Cellular and Tata Communications failed to win any spectrum.
For the full report, visit the official DoT site.