Indian & German spectrum auctions- Where is the value for money?

www.WirelessFederation.com/news: May was the month of auctions and bidding. With two of the biggest spectrum auctions in Germany and India been concluded this month, hundreds of questions have been raised regarding the outcome.

In the second highest revenue-generating spectrum auction for almost a decade, on May 19, the Indian 3G auction concluded, raising EUR 11.7 billion (USD14.6 billion). This was quickly followed by the German auction concluding on Thursday last week, raising EUR4.4 billion (USD5.5 billion). Significant drop in process of the spectrum has been noticed since the 3G auctions in 200001.

Less than expected revenue was generated in the German auction as EUR5.8 billion to EUR8 billion has been expected by the analysts but it only raised EUR4.4 billion (USD5.5 billion). A total of 360MHz (of which 2´145MHz was FDD spectrum) ranging across the 800MHz, 1800MHz, 2.1GHz and 2.6GHz bands had been auctioned by BNetzA. EUR1.3 billion to EUR1.4 billion had been spent by T-Mobile, Vodafone and O2 while E-Plus spent just EUR284 million for 70MHz of spectrum, but it failed to gain any 800MHz spectrum.

The spectrum sold in the Indian 3G auction on the other hand has been viewed as expensive. Three or four 2´5MHz lots in the 2.1GHz band in each of the 22 telecoms circles” across India had been auctioned by the Indian Department of Telecommunications and double the revenue had been generated than what was predicted. This was despite India having a GDP per capita 40 times less than that of Germany.

Vodafone which participated in both the German and Indian auctions spent EUR3.4 billion (USD4.2 billion) while in the UK and German auctions in 2001, it spent EUR18.3 billion. At the end, Indian auction might seem to be expensive but when it comes to value for money, German auction surly scores points, especially in the high frequency bands.