Etisalat Will Not Bid for India’s 2G Spectrum Auction Scheduled in November

Etisalat one of the largest telecom operators in UAE, today said that it has decided not to bid for 2G Spectrum in an India’s auction scheduled in November.

Etisalat earlier February 22nd, 2012 shut down its Indian mobile operations – Cheers Mobile, after a Supreme Court’s ordered to revoke mobile service license under 2G verdict.

The company said that “Etisalat Group has decided not to participate in the auction,” said the UAE telecom major in a released statement as it is not willing to re-participate after being canceled its owned licences. Following the publication by Department of Telecomm (DoT) – India’s Ministry of Communications and Information Technology of the information memorandum for the planned auction of spectrum in 1800MHz and 800MHz bands, the Emirates Telecommunications Corporation (Etisalat) wishes to confirm that it has decided not to participate in the auction.”

Earlier it has said that the decision to windup its India operations and not to bid for upcoming auction of 2G Spectrum has been taken in order to protect the interests of all stakeholders and to avoid incurring further costs at this time of rapid change and continued uncertainty in the Indian telecommunications sector.

This Article Was Written By: Sanjay Bafna

Sanjay Bafna - National Editor (Telecom and Mobile Phone)

Sanjay Bafna is an entrepreneur and National Editor at TelecomTALK covering Mobile Operators, 3G, Broadband, 4G, LTE, Telecom Policies & Regulations and Mobile Phones. He is well known Telecom and Mobile Analyst, Love Tea and Chocolates.

{ 23 comments… add one }

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  • Atharva January 18, 2013 12:54 pm, 12:54 PM

    need to know the online site for etisalat to get mnp code

    Reply
    • Pratham March 16, 2013 3:45 pm, 3:45 PM

      It is closed dude it was last operated on 31st March 2012 i have ported out my cheers number in the same month when they published of its shut down. Now my number is differnt from all others as the series of my no 9588.. Is closed

      Reply
  • sam September 8, 2012 4:41 pm, 4:41 PM

    ye saali chor company hai

    Reply
  • Jaswanth Roy September 8, 2012 11:57 am, 11:57 AM

    @Saurabh

    Thanks for your clarification. My Videocon connection was deactivated (outgoing calls barred), but after re-submission of the required papers connection was restored within 24 hrs time. I had recharged with high value talk time with Videocon for its lowest ISD call rates to various countries with as much as 120 % talk time on the denomination value. You gave me an awakening call, I will exhaust the talk time asap. Please also give your opinion on possible scenario for the impending spectrum re-auction on the stakes with MTS continuation of service in Chennai & ROTN, as I also use MTS connection for (enjoying currently???) lifetime validity benefit for the lowest local call rate to any network (@29p/mnt) as well for the lifetime benefit of on net 150 mnts/day free calls (now reduced to 100mnts/day) benefit, also use Mblaze as I am more comfortable with CDMA than GSM internet on connectivity issues across many places I move.

    Reply
  • Pike September 6, 2012 10:59 pm, 10:59 PM

    Saurabh :

    Pike :Videocon will continue or not in tn ? They not even announcing anything and stopped stv activations for more than 10 days !

    Read my comments througly and you will get the answer yourself as it will make picture clear to you that why Videocon can’t continue in Tamil Nadu. If you want a straight forward answer then it is a big NO which means they not gonna continue in your circle.

    thanks ya ! So i need to port out as soon as possible , tat’s right ? But videocon offers are uncomparable ! 2gb data for rs. 58 for 30 days and 200 local calls to any network for rs. 46 are really amazing !

    Reply
  • vaneesh September 6, 2012 10:07 pm, 10:07 PM

    uninor shout shown thier signal in krala circle (except paravoor taluk,fort cochin,uninor orparate ofice building and near place) from 1/9/2012…

    Reply
  • HIMANGSHU September 6, 2012 8:56 pm, 8:56 PM

    @ Sunil
    Ya thats true….Government of India is Brainless…. They even not allowing the foreign company to invest here….So there is many jobless people…In overall we can see that India is the Topmost in jobless category, corrupted,etc ,…..Why this happening you know about that??? This is only for the useless fellow government of India…..
    But what now we can…normal people..are harassing day by day…and the ministers are enjoying with our money….no Indian people come forward to Fight….against these corupted ministers / government…. they had made us like a Robot…

    Reply
  • Sunil September 6, 2012 6:40 pm, 6:40 PM

    Indian Government is a corrupted government. They steal the people’s money and do nothing for the people. Indian Financial Situation is very critical now and the politicians involve in various scams. The indian citizens will be be able to live happily without any debt if the scam money is distributed to the people again. Like wise the government conducted spectrum auctions in 2008 and collected millions and never returned to the invested companies when licenses were cancelled.

    Now the Indian government has once again decided to conduct spectrum auctions. India is loosing it own image among the world countries. The foreign countries planning to invest in India will start to stay back and even pull off the current operations. Indian people has no money and the government will struggle.

    The best option for corrupted politicians and officers is to cancel all the facilities given to them as per priority and make them live as a normal person which will make them to feel the pain of a normal citizen.

    Reply
  • Saurabh September 6, 2012 5:51 pm, 5:51 PM

    Pike :Videocon will continue or not in tn ? They not even announcing anything and stopped stv activations for more than 10 days !

    Read my comments througly and you will get the answer yourself as it will make picture clear to you that why Videocon can’t continue in Tamil Nadu. If you want a straight forward answer then it is a big NO which means they not gonna continue in your circle.

    Reply
  • Saurabh September 6, 2012 5:47 pm, 5:47 PM

    Videocon don’t have to bid for Punjab as their license is safe but if they bid for other 13 (B+C) category circles which include Assam, Bihar, Haryana, Himachal Pradesh, J&K, Kerala, Madhya Pradesh incl. Chattisgarh, North-East, Orrisa, Rajasthan, UP(E), UP(W), West Bengal and one Metro category circle i.e Kolkata then at base price, they will have to pay Rs.2601.72 crores and only Rs.867.24 as upfront cost to Goverment. If auction’s final price reaches 1.5 times the reserve price then they will have to shell out Rs.3902.58 crores and upfront cost as Rs. 1300.86 crores. So, they can have a total of 15 circles in their kitty. I understand that it tough to get revenues from C category circles but if operator manager to provide good service, they can get large chunk of customers.

    Uninor: Company was operational in 13 circles but has scaled down operations in 4 circles which are Karnataka, Kerala, Orrisa and Tamil Nadu and willing to concentrate on 9 circles which are
    Mumbai, Maharashtra
    & Goa, Gujarat, Kolkata, West Bengal,
    UP (East), UP (West), Andhra Pradesh
    and Bihar (including Jharkhand). The company officially said that the funds they generate from those 4 circles which have been scaled down will be used in 9 circles mentioned before and also the infrastructure will be also moved.

    If they bid for these 9 circles, they will have to pay Rs.7274.64 crores at base price or Rs.2424.88 as upfront cost to Goverment. If we assume final price to be 1.5 times then they will have to pay total Rs.10911.96 crores or Rs.3637.32 crores as upfront cost. By doing this, Uninor will have 2 Metro Circles, 3 A category circles, 3 B category circles and 1 C category circle.

    Idea: Idea is the only one that can create problem for others as to maintain their Pan India services tag, they will be on the forefront of bidding. In circles where they have lost licenses, they will have to pay Rs.1971 crores at base price or Rs.657 crores as upfront cost to Goverment. If auction final price reaches 1.5 times they will have to shell out Rs.2956.50 crores in total or Rs.985.50 crores as upfront cost. This figure is not much for company like Idea Cellular whose business model is strong and debts are low as compared to others. So they are in position to pay for their cancelled licenses even if bidding price becomes twice. All is well for Idea.

    Reply
  • Pike September 6, 2012 5:37 pm, 5:37 PM

    Videocon will continue or not in tn ? They not even announcing anything and stopped stv activations for more than 10 days !

    Reply
  • Saurabh September 6, 2012 4:13 pm, 4:13 PM

    There is a correction in last post of mine. The upfront cost that a winner will have to pay is 33 percent and not 10 percent. So those who win have to pay 1/3 of the final bid amount upfront and rest all in next 10 years. So, if Pan-India spectrum price reaches the level of 20k crores as expected by Goverment, Rs.6,660 crores upfront and rest in next 10 years in installments.

    Reply
  • Saurabh September 6, 2012 1:43 pm, 1:43 PM

    Here is an analysis by me:

    Depending upon the population and region, India is divided into 22 telecom circles.

    3 Metro circles- Delhi, Mumbai, Kolkata. (Chennai was also part of Metro circles but now it is included in Tamil Nadu circle and single license is applicable for operations in T.N and Chennai).

    5 A category circles- Andhra Pradesh, Gujarat, Karnataka, Maharashtra & Goa and Tamil Nadu incl. Chennai.

    8 B category circles- Haryana, Kerala, Madhya Pradesh incl. Chattisgarh, Punjab, Rajasthan, UP(East), UP(West) and West Bengal.

    6 C category circles- Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, North East and Orrisa.

    The reserve price set by Goverment for 5MHz spectrum in 1800MHz band for different circles-

    1. Metro- Rs. 5940.92 crores for 3 circles.

    2. A category- Rs. 5651.08 crores for 5 circles.

    3. B category- Rs. 2038.36 crores for 8 circles.

    4. C category- Rs.377.60 crores for 6 circles.

    Total i.e Pan-India: Metro+A+B+C= Rs. 14007.96 crores.

    The Goverment is expecting 45% appreciation of the base price in auction which clocks at at around Rs.20311 crores.

    New operators have cleared that they will not bid for Metro+A category circles due to much higher reserve price. Now talking about B+C category circles which comprises of total 14 circles, the reserve price stands at Rs.2415.96 crores and 45-50% appreciation will move the final price to around Rs.3623.94 crores.

    For Metro+A category which comprises of 8 circles, the base price is Rs.11592.00 crores. Expecting it to move up by atleast 45 percent, the final price will come around Rs.16808.40 crores and in no way Videocon and Uninor can pay such amount even though companies have to pay only 10% i.e Rs.1680.84 crores upfront and rest in installments. Even incumbents will stay away from it. For CDMA i.e 800MHz band, the price is 1.3 times the 1800MHz band price.

    Videocon is currently operational in 6 out of 21 circles i.e Gujarat, Haryana, Kerala, Madhya Pradesh, Mumbai and Tamil Nadu incl. Chennai where they have lost licenses and Punjab being their 22nd circle they are free to continue services as they overtook Quadrant Tele and SC order not applies to them in Punjab. Forget about them bidding for Mumbai, Gujarat and Tamil Nadu as these 3 being a Metro and A category circle respectively and carrying a higher price tags. At the cost of a single Metro or A category circle, they can have 2 B and 1 C category circles.

    Now they are left with Haryana, Kerala and MP for which they can bid. They can further look to bid for some more B category circles and ask the Infrastructure providers to shift the network gears or other infrastructure from Mumbai, Gujarat and Tamil Nadu to the circles they manage to win or infrastructure providers can also allot them towers in that circles if required.

    According to reports by TRAI, currently B category circles have more users than A category circles and revenues are also higher. So B+C strategy will work out for new operators like Videocon who lost their licenses. But beside this they also have to spend on more Infrastructure.

    In my next post, I will tell what we can expect Uninor to do.

    Please note that these are all assumptions and nothing is officially told by the companies.

    Reply
  • Saurabh September 6, 2012 11:34 am, 11:34 AM

    Most of us here on TT knew about it but now company has officially announced. I would call it a good decision. They were also among those who didn’t lost much as they started services commercially in 2 circles only i.e Delhi.

    @Jaswant Roy,

    Dealers in your area are right to some extent that Videocon is not willing to continue its operations in Tamil Nadu incl. Chennai and simple reason for this is, the high spectrum base price set by Goverment in A category circle. But that’s not the case in B or C category circles. But they(dealers) are wrong that company is planning to wind up business all over India. Look, they are in brand sharing pact with Quadrant Tele in Punjab. All the investment in GSM operations of Quadrant Tele was made by Videocon in Punjab and they are further expanding their network by more investment. It’s just like Videocon owning Quadrant Tele now. Videocon applied for Pan-India licenses except Punjab where they took over QTL. Their 21 licenses which were issued in 2008 has been cancelled but Videocon will continue its operation in Punjab as they haven’t lost license there.

    Now in Haryana circle too it seems like they are willing to continue operations though no official statement is made regarding this. But I heard their chairman Venugopal Dhoot saying in his interview in June that company will bid for circles with low base price and having more than 1 million subscribers, which clearly suggests that they will bid for some B and C category circles where they have operations. Haryana falls under B category and base price here is Rs.186.08 crores for 5MHz spectrum which is 7-8 times lower than the base price of Tamil Nadu having its reserve price at Rs.1232.36 crores.

    All the recharges are working in Haryana and they have also started giving more commission to dealers here. Few months back, they asked the dealers to increase the charges for new SIM from Rs.25 which came with Rs.107 FRC to Rs.150. Now SIMs are again available for as low as Rs.35.

    Recently they introduced FTT recharge of 68/108/170/220/270. I recharged Rs.68 today morning using my ICICI account and it took around 90 seconds after request.

    So atleast Punjab alle raho tension free te chak do fatte kyunki Videocon Punjab di service te chaldi rehni aa. Enjoy karde raho sabto saste operator nu.

    Reply
  • Kaushik Roy September 6, 2012 10:14 am, 10:14 AM

    Next in line will be Uninor and MTS to not participate in Auction
    Then this auction will be a BIG FLOP

    Reply
  • AMOL September 6, 2012 9:36 am, 9:36 AM

    ETISALAT, S TEL AND VIDEOCON WILL BE CLOSE DOWN. (EXCEPT UNINOR AND MTS)

    Reply
  • jaswanth roy September 5, 2012 11:09 pm, 11:09 PM

    Now dealers say, Videocon will not re-participate in spectrum auction and they are winding up their business pan India basis. Hence, they stopped all recharges through any mode, and advise us to exhaust whatever talk time we have as soon as possible, as Videocon will stop abruptly its services any time without even formal declaration. How far it is true I do not know, but conditions indicate their version might turn out to be the truth as no statements coming from Videocon for the fiasco, as no service provider has ever stopped all types of recharges without formal announcements for a such a long duration, as well as the customer service do not respond and cut the calls instantly for inquiries of any type whenever attempted .

    Reply
  • Arif September 5, 2012 9:52 pm, 9:52 PM

    Now people will scare to invest in Indian telecom industry due to past experiences.

    Reply
  • Krishnaprasanth September 5, 2012 9:34 pm, 9:34 PM

    what about MTS?

    Reply
  • abhijith September 5, 2012 8:23 pm, 8:23 PM

    Bye bYE

    Reply
  • Asit Paul September 5, 2012 8:11 pm, 8:11 PM

    As expected, Etisalat will not participate. Same implies for S Tel.

    Reply
  • Pratul September 5, 2012 7:55 pm, 7:55 PM

    what’s new in that. Everybody knew this already!

    Reply
  • Kanaga Deepan N September 5, 2012 7:09 pm, 7:09 PM

    Good for them and every one…

    Reply

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